NEARLY TWO DECADES OF UNFULLFILLED PROMISES

Oregon Governors have promoted a green energy based economy for the past sixteen years. John Kitzhaber promises to continue that effort if he is elected governor this November. The Governors have consistently promised taxpayers that Oregon’s future job growth and prosperity depends upon developing a new green economy.

First former Governor Kitzhaber, and then Governor Kulongoski,
heavily invested Oregon taxpayer dollars into green energy projects.
They exerted every effort to convince the Legislature to spend hundreds of millions of taxpayer dollars on subsidies, tax incentives and tax credits to encourage private sector investment in green projects. They worked tirelessly to develop, and implement, a Renewable Portfolio Standard that forces utilities to purchase and distribute renewable green energy no matter what the cost to the ratepayers.

 They promised that all this investment in green energy would stimulate Oregon’s economy, accelerate job growth, and lead Oregonians into prosperity.

So how well are the promises being kept?

 This month about one million eight hundred thousand Oregonians have jobs. Only 1.9% of those jobs are identifiable as green jobs by the Oregon Department of Employment. Another way to state the statistic is that only 51,000 of 1.8 million Oregon jobs are green.  Obviously, this means that more than 98% of Oregon jobs are not green.

 It actually is worse than it sounds.

 Most of the private sector green jobs are heavily subsidized with Oregon tax dollars. According to the Oregon Employment Department three of the larger green jobs employers are the U.S Forest Service, the U.S. Army Corp of Engineers, and the U.S. Bureau of Land Management. All of those green job employees’ salaries are paid with tax dollars.

The Bonneville Power Administration and PacifiCorp are identified as two more major green job employers. Virtually all of their green job employees’ salaries are paid by utility ratepayers.

 The common denominator is that taxpayer, or ratepayer dollars, are paying for, or subsidizing virtually all of these green jobs.

The vast sums of tax and utility rate dollars that are being taken from the private sector is driving up their costs of doing business. The net equation is the shift of enormous amounts of tax and utility rate dollars from the non-green business sector that provides jobs to 98% of Oregonians to the green business sector that provides jobs to less than 2% of the state workforce. The direct result is that businesses that must pay these higher taxes and utility rates have less money to grow their firms and to create jobs. Oregon’s small business community that creates three out of every four new jobs is hurt the worst.

 Oregon lost more than 100,000 private sector jobs in 2009. According to the Oregon Department of Employment, the state is on track to lose nearly 20,000 more jobs in 2010. Combined unemployment and underemployment exceeds 17% in the Oregon workforce.

Clearly, the Governors’ unfulfilled promises are driving Oregon’s economy in the wrong direction. Our economy will continue to suffer until these failed policies are reversed.

 The Renewable Portfolio Standard requires a progressively higher percentage of electricity to be generated from renewable sources. In fact, it requires that twenty five percent of all electricity used by PacifiCorp and PGE ratepayers must be generated from renewable sources within fifteen years. However, less than five percent of non-hydroelectric power is currently being generated from renewable sources, even after sixteen years of green energy promotion, generous tax subsidies and the forced integration of renewable energy sources.

The Renewable Portfolio Standard mandates that enough renewable power to serve more than one million residential customers must be on line by 2025. The requirement equals more than 1,200 megawatts and is equivalent to about 3,700 megawatts of intermittent wind power generation capacity. It will require construction of 1,230 wind turbines at a cost of more than eight billion dollars. The cost of alternative solar generation is significantly even more expensive and less reliable.

Hydropower generation is currently by far the cheapest source of electricity. The current blended rate for hydro, thermal and other renewable sources is significantly more expensive. Moreover, the current cost of generation for all non-hydro sources of renewable electricity are orders of magnitude more expensive than the current blended rates.

The mandated renewable energy generation will not be constructed without continued tax incentives and subsidized utility rates. The cost of non-hydro renewable energy generation is not competitive by an order of magnitude. No well informed private sector firm will invest in proven noncompetitive technology without government guarantees that they will be allowed to recover their investment costs. Those guarantees will be paid by tax incentives, tax credits and  higher utility rates.

 Oregon utility ratepayers have experienced rapid cost increases over the past several years. Those rate increases will accelerate as the utilities are forced to bring more non-hydro noncompetitive renewable generation on line. Major utilities are currently asking to charge yet another double digit increase to their customers.

The utilities are monopolies regulated by the Oregon Public Utility Commission.  They are allowed to recover their prudently incurred costs that are attributed to their compliance with the Renewable Portfolio Standard. Therefore, it is not the utilities and their stockholders that will bear the costs. It is the utility ratepayers that will be required to bear the burden of these greatly increased expenses.

The Renewable Portfolio Standard states that hydropower generation facilities built before 1995 do not generate renewable power. So according to Oregon law the removal or destruction of hydroelectric dams technically does not reduce the availability of renewable power. This feature was inserted into the 2007 act to facilitate the efforts of the Governor and the other interests who promote the destruction of Northwest hydropower dams.

Many of us battled long and hard against adopting the Renewable Portfolio Standard. We fought especially hard against that Orwellian definition that brands existing hydropower non-renewable because we knew that it was designed to open the door for dam removal. Unfortunately, Governor Kulongoski and his legislator supporters had the majority, and they prevailed in the vote to adopt both the Standard and the ridiculous definition.

The direct result is the current effort to destroy the PacifiCorp hydroelectric dams on the Klamath River as well as the impending assault on the Lower Snake River Dams.

In summary, sixteen years of green energy promotion has netted
less than two percent green jobs, has drained billions of dollars and family wage jobs out of our private sector economy, has insured exponentially higher utility rates into the future, and has created the pathway for the destruction of the hydropower infrastructure that is the economic engine of the Northwest.

 The two most commonly stated reasons for the need to develop renewable green energy are the need for energy independence and the concern regarding global temperature changes related to greenhouse gas emission from fossil fuel combustion.

 However, development of known United States oil and natural gas reserves would create energy independence for at least two centuries.  According to the US Geological Survey, the Bakken oil shale formation in the Williston Basin in Montana and the Dakotas holds more economically recoverable oil reserves than Saudi Arabia did before development. Further, natural gas reserves in the continental United States range into the trillions of cubic feet.

Moreover, a rapidly increasing body of empirical scientific data is confirming that the combustion of carbon based fuels have little if any influence on global temperature change.  The climate modeling that predicted catastrophic global warming has lost credibility because their predictions have not materialized and because some of the workers who promulgated the models are now known to have manipulated the data to confirm a predetermined outcome.
 
Why would anyone seriously want to continue policies that so obviously have failed to create jobs, have failed to create economic growth, and that without a doubt will continue to stifle Oregon’s  economic growth into the future?