OCTax opposes the Solar and Clean Energy Act of 2008, an initiative on the Nov. 4 ballot.
The act would:
– Require all utilities, including government utilities, to generate 20% of their power from renewable energy by 2010, a standard now applicable only to private corporations.
– Raise clean energy requirements for all utilities to 40% by 2020 and 50% by 2025.
– Levy penalties for noncompliance and prevent penalties from being passed to customers.
– Allow recovery in retail rates of increases in transmission costs.
– Arbitrarily cap price impacts on consumers’ electricity bills at less than 3%.
– Prohibit new hydroelectric dams that require new or increased diversion of water.
– Require utilities to sign 20-year contracts for renewable energy, regardless of cost.
– Create an account to buy property or rights of way for renewable energy.
Fiscal impact: state costs of up to $3.4 million annually for regulatory activities, paid for by fees. Potential increased costs and reduced revenues to state and local governments resulting from increased retail electricity rates. Possible cost savings and revenue increases to the extent the measure hastens renewable energy development.
OCTax analysis: This act declares arbitrarily that “global warming and climate change is a real crisis” and that “clean energy sources in the long run are cheaper” than fossil fuels. Not all scientists, consumers and taxpayers share those assumptions. Experience shows that regulations imposed in hasty response to trendy causes usually raise prices and offer questionable benefits (taxpayers and motorists now pay a subsidy of 52 cents per gallon for ethanol).
The act seeks to create and exploit distrust of market solutions: alternative fuel producers, unable to compete on merit or price, seek to handicap traditional suppliers by imposing penalties, unneeded costs and regulation.
The act promises grandiose benefits, with little substantiation. It would impose onerous and probably infeasible mandates on private companies, likely saddling consumers with higher taxes and higher energy costs. The economic damage that the act might cause would be almost impossible to reverse. In the face of such uncertainty and risk, common sense demands skepticism.
Finally, this complicated act is 42 pages long. Perhaps we need a law that prohibits any person from voting for it that cannot prove that he or she has read and understands the whole thing.
Reed Royalty,
President,
Orange County Taxpayers Association
San Juan Capistrano
