A Federal Renewable Portfolio Standard — Is It Fair?

I had lunch last week with a senior engineer at SMUD (Sacramento Municipal Utility District), whose responsibility is managing the delivery of electricity while minimizing damage to air quality. “It’s terrible,” he told me over our salads.

“I thought it was actually pretty good.” I replied, a bit surprised.

“No, I mean what we were talking about a second ago. The clean air mandates in California are so onerous that they’re prohibitively expensive.”

“Oh. But don’t most other states face a different version of the same problem?” I asked naively.

“Not at all. To win popular appeal, our legislators have set the bar ridiculously high. You could replace every car on the roads with bicycles – and there would still be a few days in the year that you wouldn’t meet the targets. There were pictures of Los Angeles taken in the early 20^th Century that show smog from decaying vegetable matter and wild fires. We have concentrations of ozone precursors that are simply impossble to deal with; it’s just the way the land is formed.

“So California has to do things to have clean air that cost far more per kilowatt-hour than any other state in the union. And how do we pay those costs? With taxes and regulation that drive the businesses out to states that simply haven’t gotten tough with air quality, or that are fortunate enough to have good air naturally.”

This got me thinking about my position on a federal Renewable Portfolio Standard that I’ve been recommending. Maybe this isn’t really a good idea after all. The southwest has sun, the plains have wind, the mountains have geothermal, the east has hydro, but renewable energy resources in some areas of the country are simply far more scarce than they are elsewhere. I suppose the fair thing to do is to rate each state on the availability of clean energy resources, and build mandates around those ratings.

Of course, the real solution (as I’ve often suggested) is simply to remove the subsidies that make energy from fossil fuels artificially inexpensive, and let the problem take care of itself in about a nanosecond.