The political tide is turning against state mandates for renewable energy.
On February 3rd, Democrat West Virginia Governor Earl Ray Tomblin signed legislation that repealed the West Virginia Alternative Renewable Energy Portfolio Act.
The repeal was the fist bill signed in the state’s 2015 regular legislative session.
The West Virginia renewable energy legislation signed by then Democrat Governor Joe Manchin in 2009 required electric utilities to get 25 percent of electricity from renewable or alternative sources of energy by 2025.
Under the law, small power producers such as rural electric cooperatives, municipal utilities and companies serving less than 30,000 customers were exempt. The bill included renewable energy targets over time – 10 percent by 2015 and 15 percent by 2020.
Governor Tomblin said in a press statement that the renewable energy mandate, “…is no longer beneficial” to the state and he noted the legislation had passed both legislative chambers with “… overwhelming bipartisan support.”
Rejection of state energy mandates is a positive step for West Virginia and the bipartisan support for the repeal effort is notable.
West Virginia is not the only state that is moving against a command and control energy policy.
Last year, Ohio Republican Governor John Kasich signed legislation that froze the state’s renewable energy and efficiency mandate for utilities.
A state law signed by Kasich in 2008 required utilities to adopt energy efficiency methods that result in 22 percent in electricity savings by 2025 and it also mandated utilities must obtain 25 percent of their electricity from renewables and alternative energy sources by the same year.
The new bill freezes the utility mandate for two years while a state commission studies the targets of the 2008 legislation.
Reversing energy mandates is great news for the free market and consumers but it’s a warning sign to green energy companies and their investors.
The financial success of wind and solar power companies is dependent on government action including forcing the use of their products through mandates and these companies also benefit from state and federal subsidies.
The shifting political winds in states such as Ohio and West Virginia is a reminder that the renewable and alternative energy business model is built on shaky and unsustainable ground.