2017 UPDATE: 2014 white paper The Impacts of State Energy Plans
The growth in the adoption of state energy plans nationwide has continued as five states have added a state energy plan since our 2014 report. At a quick glance, the impact of state energy plans is on economic development rather than energy prices. More study is needed on those states with plans that have metrics and regular review (per HB 661) versus those that simply have policy statements. But, it does seem clear that when a plan is in place, new businesses are created and the state’s economy is positively impacted.
Average Growth, GDP per state
Our analysis in 2014 concluded that SEPs had not affected the GDP growth per state. As we gathered new data from Bureau of Economic Analysis, we found out that after the financial crisis of 2007-08 and the U.S. subprime mortgage crisis of 2007-09, the states with an SEP outperformed the states without an SEP, though only barely with ¼%. While this data is not causal, these findings do suggest a relationship between good long-term planning and positive GDP growth.
Our analysis in 2014 indicated that the impact of a SEP on business establishments seemed to be positive. We found the same trend from data we collected in 2017, where states with an SEP have more business establishments than states without an SEP. This finding further confirms the notion that the adoption of an SEP has positively affected the economic growth.
Electricity Prices and Natural Gas Prices
Both the 2014 analysis and this update demonstrate the impact of the national and global energy market on local prices. State energy plans did not demonstrate the ability to lower energy costs as compared to those states that did not have plans. This is likely because natural gas prices are determined by a national market, electricity is traded and delivered via a regional market (ISO) and the type of energy sources used for energy is regionalized (coal in Midwest, natural gas in the northeast).
MEI is a 501(c)3 working collaboratively to identify opportunities and solutions to meet Missouri’s energy needs through support and facilitation of energy economic development, education, research and pragmatic policies. Our Vision is to be Missouri’s trusted source and forum for information and solutions on innovative, reliable and affordable energy for Missouri.
Missouri Energy Initiative, 238 East High Street, 3rd Fl, Jefferson City, MO 65101 | Ph: (573) 616-1046 | www.moenergy.org
Information Sources: U.S. Energy Information Administration, Bureau of Economic Analysis, & U.S. Census Bureau Longitudinal Business Database 1976-2014