Alexander: “The Jobs Come When We Have Cheap Electricity,” Not From Propping Up One Form of Energy

Posted on September 17, 2013

Asks Federal Energy Regulatory Commission nominee whether he’s a “high-cost or low-cost regulator”

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“In my experience, whether we have more or less people working for coal plants or more or less people working for windmills or more or less people working for natural gas plants is not where the jobs are. The jobs come when we have cheap electricity, and, for example, Eastman Chemical stays in Tennessee instead of going to Asia.” – Lamar Alexander 

WASHINGTON, Sept. 17 – U.S. Senator Lamar Alexander (R-Tenn.) today told Ronald Binz, President Obama’s nominee to head the Federal Energy Regulatory Commission, that lasting job creation comes from cheap electricity, not favoring one type of energy over another. He also got Binz to acknowledge that the wind production tax credit should end.

[To access video, click here: 9-17-13 ENR hearing on WPTC.mp4

“Mr. Binz, I’d like to explore whether you’re a high-cost or a low-cost regulator,” Alexander said at a hearing of the U.S. Senate Committee on Energy and Natural Resources. “In my experience, whether we have more or less people working for coal plants or more or less people working for windmills or more or less people working for natural gas plants is not where the jobs are. The jobs come when we have cheap electricity, and, for example, Eastman Chemical stays in Tennessee instead of going to Asia. Or we have 1,000 auto suppliers here in Tennessee instead of Mexico. So we want clean, reliable, cheap electricity.” 

He also criticized the wind production tax credit, asking Binz if “it’s time to repeal it after 21 years, since it cost $12 billion to renew it for a single year” in 2012. Binz responded, “I think that proposals to phase that out are timely.” 

Alexander went on to ask Binz whether his review as head of FERC would include how the wind production tax credit is affecting the free market, given the phenomenon of “negative pricing,” in which wind producers are making so much money off of federal taxpayers that the wind producers are paying the market to purchase their power. Alexander said negative pricing is undermining other sources of cheap, clean, reliable energy such as nuclear, and Binz said his review would include the wind production tax credit.

Alexander’s remarks included criticism of government incentives that distort the market, such as in Germany, where a cap-and-trade system and subsidies of wind and solar have driven up costs.

“I’ve been to Germany recently. They’ve subsidized wind, they’ve subsidized solar, they’ve closed their nuclear plants,” Alexander said. “So the result is they’re buying nuclear power from France, they’re buying gas from a very unreliable partner, Russia. They’ve adopted cap and trade, which we’ve rejected, and they are actually having to build coal plants in order to have enough electricity.”

Alexander added that he asked a German economic minister what he’d say to companies looking to locate to Germany but concerned about energy costs, to which the minister said they should “go somewhere else.”

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