January 13, 2023
State spotlight: American Experiment’s energy research defeats Build Back Better
It’s always a spectacle when Washington politicians make promises about the price tag of their favored piece of legislation. They explain and give every possible caveat to convince taxpayers and voters why their estimates are accurate and how there’s no possibility they overlooked anything.
And then the true costs come out.
Americans got a full view of this spectacle when President Biden and Democratic members of Congress were pushing “Build Back Better.” Build Back Better was a sweeping bill that promised to address issues with the nation’s infrastructure and energy systems. The bill was projected to cost trillions and included massive changes to the country’s energy laws, shifting much of the country’s energy production to “green” energy.
Centerpiece to Build Back Better’s energy plan was a controversial provision called the Clean Electricity Performance Program (CEPP). If passed, the CEPP would dramatically alter most of the nation’s energy laws and regulations, and move the entire country closer to the energy policies of states like California.
The CEPP appropriated $150 billion for all of its sweeping energy policies which included steadily increasing wind and solar power on a state-by-state basis.
However, thanks to groundbreaking research from the experts at the Center of the American Experiment, the true costs of the CEPP—and its impacts on people’s lives—were exposed.
The CEPP has multiple aspects and provisions, as Forbes contributor Robert Bryce explained it,
“The language of the CEPP is confusing. But the gist of it is this: If an electricity provider meets a certain threshold, it would get at least $18 for each megawatt-hour of “clean” energy it produces over the eight-year period from 2023 to 2030. If the PTC for wind energy is extended at $25 per megawatt-hour, then a company that is able to significantly increase (by at least 4% over the previous year) its production, could collect a total of $43 per megawatt-hour per year for each new megawatt-hour of wind energy it sells. That’s a staggering sum given that the wholesale price of electricity in New York last year was $33 per megawatt-hour. In Texas, the wholesale price of juice was $22 per MWh. Put another way, if the Democrats get everything on their climate-change wish list, an electricity provider operating in Texas could, within a few years, be collecting nearly twice as much in federal tax incentives for some of the output from its new wind energy production as it could get for selling that power into the wholesale market.”
The CEPP would dramatically alter how Americans across the country get their power. And when American Experiment’s policy experts Isaac Orr and Mitch Rolling began digging into exactly how the CEPP would change the nation’s energy grid, they found that everyday Americans would be saddled with massive costs.
To show the CEPP’s true cost, Orr and Rolling focused on Arizona and West Virginia and produced two reports showing how the CEPP would alter those state’s energy systems.
In their reports, Orr and Rolling exposed how the CEPP would cost the average electricity customer over $1000 a year through 2052 in increased energy costs ($1,100 in West Virginia and $1,200 in Arizona). These totals were much higher than the government estimates and provided sticker shock to many. As Arizona’s majority Senate leader Rick Gray said, “Now, I am not saying that we shouldn’t pass policies to combat the effects of climate change—but we need to be smart so that we don’t hamstring our already hobbled economy. […] We do not need the failed energy policies of states like California, which has implemented clean electricity standards that have exacerbated blackouts, threatening public health and the reliability of their grid. Arizonans don’t want and don’t need overly burdensome federal regulations.”
Because of American Experiment’s research showing the true cost of the CEPP, shortly after the studies were released, West Virginia Senator Joe Manchin announced that he would not support the CEPP. Manchin then forced the White House to develop more reasonable and less expensive policy proposals for Build Back Better.
Even though Build Back Better eventually passed, because of the research and strategy of the Center of the American Experiment, Americans will not face the massive costs they would have if the original legislation had gone through.
Orr and Rolling summed up the significance of their research well when they said, “Our electric grid acts as the arteries of our entire economy. Americans can’t afford to find out what is in the reconciliation package, and the CEPP, if we pass it. Sometimes, the best deals are the ones you don’t make.”
