Nancy Pelosi

Instead of a bunch of small, bad energy bills, why not have one, large bad energy bill? That seems to be the sentiment coming from Speaker of the House Nancy Pelosi. Cap-and-trade. A National Renewable Portfolio Standard. A New Smart Grid. Throw it all in there.

Pelosi told reporters yesterday on Capitol Hill:

I would like to see one bill, which is the energy bill, with the cap and trade and the grid piece. I think having it as one bill shows the — I don’t want to say the integrity — the oneness of it all, how it all relates to each other.”

In reality, these are all separate issues and should be addressed separately.

Cap-and-trade: A cap-and-trade program to reduce carbon dioxide emissions is nothing more than a regressive tax that will raise energy prices and cost Americans jobs – all for little, if any, environmental gain. A cap-and-trade is a less predictable version of a carbon tax and there is plenty of hope Americans won’t stand for an expensive energy tax, especially in a recessionary environment.

Renewable Portfolio Standard (RPS): A national RPS standard would mandate that a certain percentage of America’s energy come from wind, solar and other renewable energy sources by a certain year. The latest talk has been 25% by 2025. The result of an RPS will be less reliable electricity and higher prices for the taxpayer and the ratepayer. Heritage energy expert Ben Lieberman writes,

The only reason why renewable electricity needs to be mandated in the first place is that these alternatives are far too expensive to compete otherwise. In effect, Washington is forcing costlier energy options on the public. This is particularly true for certain states, especially those in the Southeast, where the conditions are not conducive to wind power.

Moreover, these sources of electricity are intermittent and unreliable and thus pose problems beyond the added costs. And like ethanol, renewable sources of electricity enjoy substantial tax breaks; thus, the mandate will cost Americans both as taxpayers and as ratepayers.”

Smart Grid: A smart grid may very well be beneficial for energy consumers, but a federally mandated smart grid is a bad idea.  Some aspects of a smart grid may make sense while others do not.  Overall, it’s an extremely large undertaking and there’s no reason for the federal government to rush to judgment without first answering a number of questions. Does a smart grid only make sense if we invest heavily in renewables? If it’s a good, profitable idea, why isn’t the private sector investing in it? Are there regulatory hurdles that are keeping the private sector from investing in a smart grid?

Maybe Nancy Pelosi was right in saying there’s a sense of “oneness” when it comes to these three policies. All three are anti-consumer, anti-energy, anti-growth measures that punish successful energy sources to subsidize unsuccessful ones.