While there are some marginal economic benefits to greater reliance on renewable energy, these benefits are overshadowed by the substantially more expensive cost of production. Looking at Nevada specifically, the net cost of renewable standards are striking:
- Energy prices are expected to climb by nearly 15 percent in 2016.
- Employment growth will be reduced by more than 11,000 jobs in 2016 due to higher energy costs.
- Economic growth will be reduced by more than $1.7 billion in 2016.
Nevada’s electric monopoly, NV Energy, has asked the state Public Utilities Commission to approve a controversial proposal to build a new 706-megawatt natural gas power plant that could cost up to $1 billion.
Compared to the alternative of purchasing natural gas power from existing power plants, the marginal cost to ratepayers of NV Energy’s plan for a new power plant would be $115 million in 2020 alone.
Building the new power plant would reduce employment by 1,614 jobs, and lower investment in Nevada by $18 million. Electricity rates would increase by 3.2 percent, costing the average consumer each year an additional $31 and the average industrial rate payer $9,970. From 2020-2025, the increased cost to ratepayers will total $604 million.
In the coming years, Nevada residents will come face-to-face with the state’s energy policy as Senate Bill 123 is implemented. The law was passed by the 2013 Legislature and requires NV Energy to shut down its remaining coal-fired power plants by the year 2020.
In this analysis, the Beacon Hill Institute at Suffolk University looks into the economic implications of implementing the renewable energy bill. Using its State Tax Analysis Modeling Program — a five-year model programmed to simulate changes in the economy such as taxes and costs — researchers at Beacon Hill were able to estimate the shift in employment, disposable income, energy costs and more that will occur as SB123 is implemented.
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