More unintended consequences from government action

Victor Joecks

Thanks to Nevada's politicians, here's the fuel of the future
Just consider this another reason why the government shouldn’t pick the winners and losers in an economy (using subsidies, tax credits or regulation).

At the Reid Gardner coal plant about 50 miles northeast of Las Vegas, the utility last month began mixing wood chips with the coal burned to produce electricity at the plant.

If it works the way the company hopes, NV Energy intends to use the wood-coal mix to qualify the power plant for a bit of renewable energy credit, another step toward meeting the state’s mandates for increasing the use of renewable energy.

That’s right, NV Energy may have a coal plant classified as producing at least some of its energy from a renewable source – biomass fuel. Biomass is biological material derived from living or recently living organisms. That includes organic garbage, alcohol fuels and wood.

The state renewable energy portfolio standard – NV Energy must produce 25 percent of its electricity using renewable resources and energy efficiency measures by 2025 – allows the use of biomass to generate electricity. But state lawmakers said they hadn’t intended that to mean burning wood in coal plants.

“I don’t think we contemplated it this way,” said Randolph Townsend, the senior GOP state lawmaker on renewable energy issues. “We’d prefer it was just a biomass capacity, not mixed with something that’s not renewable. That defeats the purpose, which is to encourage and incentivize renewable activity.”

“‘I don’t think we contemplated it this way,’ said Randolph Townsend …”

Sen. Townsend, it’s not the role of politicians to contemplate the outcomes of targeted tax breaks, because tax rates shouldn’t be targeted. Our elected representatives’ job is to establish a uniform and low tax and regulatory burden, not to socially engineer desired outcomes – which rarely (if ever) turn out as they anticipated.