Most energy consumers in the Commonwealth of Pennsylvania have probably noticed some odd goings on but aren’t aware of the of scam being run on them as a result of the implementation of the Pennsylvania Alternative Energy Portfolio Standards Act of 2004. [[1]] Some of the legislators involved in passage of this unkind act [[2]], Governor Rendell and certain members of his administration, regulators at the PA Public Utility Commission (PUC) [[3]], crony capitalists [[4]] at the regulated utilities, and an assortment of global warmists, environmental activist, and their paid lobbyists are fully aware of the scam.
The PA Alternative Energy Portfolio Standards Act created something called an “alternative energy credit” (AEC). The perpetrators of this act must have done some homework and figured out that a voluntary renewable energy credit (REC) [[5]] approach wouldn’t put enough slush into the fund. The AEC is defined as: “A tradable instrument that is used to establish, verify and monitor compliance with this act. A unit of credit shall equal one megawatt hour of electricity from an alternative energy source.” The act also defines two tiers of alternative energy and the percentage of the total electricity supplied by regulated electric distribution companies or electric generation suppliers (power companies – e.g. UGI, Duquesne Light, ConEdison, etc) to retail electric customers that must come from each type of alternative energy source (e.g. solar, wind, biomass, etc). [[6]]
Here’s where things start to get scammy. Power companies don’t have to generate electricity from these sources or buy it from an individual or entity that is generating electricity from one of these sources. They can buy a certificate that gives them credit toward their mandated percentage from some other entity that is generating electricity using one of the defined sources. Power companies can recover the cost of that certificate in the rate they charge the consumer for the electricity they (power companies) do generate/sell.
Have you ever wondered why a company would buy ad time on television or radio to try to convince their customers to use less of the product they sell, in this case electricity? That would be because included in the “defined” Tier II types of alternative energy that a power company can take credit for is a thing called demand-side management; something that isn’t actually energy. Demand-side management includes “promoting” energy efficiency technologies or appliances that reduce electricity consumption and other things like encouraging consumption during off peak hours. The cost of advertising or otherwise “promoting” these things is a form of AEC and is recoverable in the rates they charge as well.
But wait. It gets worse. A Carlisle, PA school district’s solar energy system project [ [7]] receipt of stimulus funds earlier in 2010 is mentioned in a recent Patriot News (“Stimulus worked, say recipients”) [[8]]; a feeble attempt to convince readers that the Obama administration’s stimulus legislation was good deal because some of the pork got spread around in central PA. A very brief item about a contract the school district signed with a solar renewable energy credit broker was found during the search of Carlisle Sentinel articles. [[9]]
In addition to being able to parlay a collection of various tax dollars in the form of grants, stimulus dollars, and local taxes into a 6 acre array of solar panels that allegedly will save $150 thousand a month in electricity costs, the Carlisle school district will also be able to get money from the sale of AECs. Consumers will end up paying for these AECs in their utility bills. Exactly what are the chances that the Carlisle school district will reduce their funding requests and return any of the electricity cost savings or AEC receipts to taxpayers? So now not only do we use tax dollars to fund a renewable energy project that could not pass muster in a free market review, we also allow a government entity to participate in the renewable energy scam and take even more money out of the pockets of unsuspecting energy consumers/taxpayers.
We the People of the Commonwealth of PA have, to say the least, been poorly served by our elected representatives at the state level but taken to the cleaners, screwed, had, ripped off, defrauded, or scammed might be more appropriate descriptors.
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End Notes
[1] Available at http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2003&sind=0&body=S&type=B&bn=1030
[2] Because of the way legislation gets to the floor for a vote and how that vote goes in Pennsylvania is almost always determined by a shadowy, operate behind closed doors, group of legislative thugs generally referred to as the “caucus leadership” it is not reasonable to assume that every legislator that voted for the Pennsylvania Alternative Energy Portfolio Standards Act of 2004 actually knew what they were voting for. Many of them were probably just playing follow the leader.
[3] The PA PUC managed to implement the 22 page Alternative Energy Portfolio Standards Act in only 33 pages of regulations.
Implementation of the Alternative Energy Portfolio Standards Act of 2004 12-20-2008
http://www.pabulletin.com/secure/data/vol38/38-51/2286.html
[4] Crony capitalism is where on the basis of close relationships between certain businesses and government entities instead of the free market and the rule of law determining business success, success is dependent on favoritism in the form of favorable regulations, tax breaks, government grants and other incentives that provide an advantage over competitors or excludes them from or drives them out of the market. The cozy relationship between regulated businesses such as power companies and state/federal legislators and agencies that “regulate” them is a classic case of crony capitalism. Rather than convince the consumer that the price being charged for electricity is a good deal all the power companies need do is convince some regulator that a “cost” being incurred is reasonable or within the guidelines of published regulations.
[5] Energy Credits Prove Inflated With Green Claims Seen as Hot Air – Bloomberg 12-7-10
[6] Tier I includes solar photovoltaic energy, wind power, low-impact hydropower, geothermal energy, biologically derived methane gas, fuel cells, biomass energy, and coal mine methane. Tier II alternative energy includes waste coal, distributed generation systems, demand-side management, large-scale hydropower, municipal solid waste, by-products of pulping and wood manufacturing processes, and integrated combined gasification technology.
[7] Carlisle school district to break ground on solar project – 4-23-10
http://cumberlink.com/news/local/article_f0ff2ae8-ba2e-54cf-8251-7aceca515327.html
[8] See the post Put lipstick on Obama’s economic stimulus and it’s still a pig at http://www.ourfounderscompass.com/archives/1752 for more about the Patriot News article and the feeble attempt at justifying Obama’s stimulus waste of money.
[9] CASD solar contract approved 9-16-10
http://www.cumberlink.com/news/local/education/article_f0c23c12-dc3b-11df-84d1-001cc4c002e0.html
