Turns out that’s not true. In fact, that’s not even close to true.

Consider this past October, when AARP’s Sustainability Manager, Pam Evans, told the organization’s members that “cheap energy – in the form of coal – has brought us increased heart disease, cancer, asthma, learning disabilities, and neurological disorders in children.” That hardly sounds “fuel neutral.”

And who does AARP’s Sustainability Manager quote when explicitly blaming America’s coal-fired fleet for crippling our children? Not epidemiologists or doctors, but an environmental group that blames mercury for neurological problems in our kids. Keep in mind that EPA itself, in its findings to support its mammoth Utility MACT rule to address mercury from coal-fired power plants, refused to go that far. It’s telling that the same group cited by AARP fights to block construction of coal-fired plants and replace them with solar and wind power.

After providing a link to the Sierra Club’s Beyond Coal campaign, Evans concludes by admonishing AARP’s members, “…if we continue along the current picture of cheap energy over clean(er) energy, the price will continue to rise, and will be paid by our children, grandchildren and beyond.”

Compare these words to the language the Sierra Club uses when dancing on the graves of shuttered coal-fired plants: “With each coal plant that we retire, we are clearing the path for clean, renewable energy that doesn’t make our children sick…” Can you tell the difference between the Sierra Club’s rhetoric and AARP’s? We can’t.

Consider the remarks of Elaine Ryan, AARP’s Vice President of Government Relations, who said, “we want to see a a bill that reduces greenhouse emissions.” That was in 2009, when AARP joined a coalition of other interest groups to support sweeping climate legislation. The bill supported by AARP was “Cap and Trade” style legislation that would have taxed coal-fired power and other carbon-based energy sources, as a way of forcing utilities to invest in more alternative sources of power such as solar, wind, and biomass. That hardly sounds like fuel neutrality either.

Or consider the year prior, when AARP joined with the Sierra Club to fight for significant changes in electricity pricing rules in Ohio. After lawmakers in that state passed a law to add new standards for renewable energy, the AARP and Sierra Club teamed with other activists to make it more difficult for utilities to raise power prices, even as they were being forced to make new investments in renewable energy. The Columbus Dispatch explained that AARP recommended changes that “would strengthen the rules for renewable energy…” That certainly sounds like AARP is picking favorites, doesn’t it?

All of which makes the claims of “fuel neutrality” by Coffman and Bradford so shockingly brazen. Dr. Jack Bradford is a retired university administrator who has represented AARP as a spokesperson for years. Mr. Coffman is a paid expert who has directly represented AARP in rate cases in Missouri and Georgia, filed a brief in Florida on behalf of AARP, and has been offering testimony on behalf of the organization for months in Alabama. In short, it’s safe to say that both men know AARP – and the group’s anti-coal, pro-renewable positions – very well. Or at least they should.

The truth is that despite the sanitized version of AARP’s energy policy that its representatives chose to offer Alabama’s Public Service Commission yesterday, AARP’s actions in communities across America for years now offer a far uglier picture. Those actions depict an organization indistinguishable from the Sierra Club on the issue of fuel choice and ideologically committed to running America’s coal industry and the reliable, affordable power it supports into the ground.

Consider the case of Iowa, where the Federal Energy Regulatory Commission (FERC) is considering whether customers of Interstate Power & Light Co. in Iowa and Minnesota should be forced to pay a substantial portion of the costs for new transmission to connect wind farms to the grid. The cost is substantial, saddling half a million customers with $170.5 million over a nine-year period.

Or Michigan, where electricity rate payers were asked to cough up 20% of the costs – over $3 billion – to build transmission lines for wind farms outside of the state, even though state laws disallows renewable power generated outside of Michigan from counting toward the state’s Renewable Portfolio Standard. What benefit did those customers get for their investment? The warm and fuzzy feeling that someone, somewhere was drying their laundry with wind power?

The confusion stems, in part, from FERC’s Order 1000, that allows regulators to spread the cost of building new transmission fairly liberally, even to customers that don’t really see the benefit. This is termed “cost socialization” and appears to FERC’s preference, at least for now, for paying the nearly $150 billion it could cost to connect onshore and offshore wind turbines to the grid. Turns out that while the wind itself is free, it is frighteningly expensive to get it into your light bulb.

The Wall Street Journal calls cost socialization “like arguing that Oklahomans should pay to fix potholes in Manhattan.” That’s a good analogy, but here’s a real-life example. Customers of Entergy in places like Mississippi and Louisiana will soon be part of a regional transmission organization that stretches across the Midwest in 15 states and even into Canada. But will power customers as far south as New Orleans have no choice but to pay the cost of building transmission lines for wind farms in Minnesota that satisfy Renewable Portfolio Standards in Illinois, Iowa, and Missouri? It certainly seems so.

In other words, through Order 1000’s system of cost socialization, you could soon be asked to pay the cost of renewable energy mandates whether you like it or not. It’s time for our energy policy makers in Washington, DC, to work with FERC to make sure that doesn’t happen.

Understanding what is being debated at these informal hearings starts with acknowledging what the equity of rate return means. Utilities get the money to pay for their operations in two ways: 1) through assuming debt and 2) through asking investors to put up money. While the first method involves borrowing from financial institutions, kind of like a mortgage, the second involves taking money from investors with the expectation that your operations will grant them a return on their dollar. Investors have a wide range of choices for their dollar, so it’s important that the rate of return on this equity be competitive. Utilities are expensive to maintain and require lots of capital, meaning that providing natural gas or electricity with a high degree of reliability requires lots of money both from debt and equity.

Here’s the important part. Since regulated utilities aren’t like others in the open marketplace, regulators have to decide what percentage of return they should be allowed to collect to pay back investors. That percentage, called return on equity, is just one of several numbers that work in combination to determine what customers pay for natural gas or electricity. For example, if a utility has equal amounts of debt and equity, with an allowed return of 8% on debt and 12% on equity, then the amount customers would actually pay as part of their bill would be the average of those two, or 10%. While that is a simple example, the bottom line is that return on equity is always just one part of what figures into a customer’s bill. Other factors are just as important.

After a number of informal hearings and presentations from various experts in the case of Mobile Gas Company, it became clear that a difference of opinion exists among participants. Interest groups such as AARP believe the return on equity is too high, offering testimony that claims customers of Mobile Gas Company pay more than they should. They don’t like the framework under which the Alabama PSC figures rates for customers, although they admit there is no evidence to suggest the methods they prefer from other states would save customers of Mobile Gas Company or other utilities a penny. They simply want Mobile Gas Company and its investors to make less money on their investments in equity. By our calculations, their proposal would save the average Mobile Gas customer about $3 per month.

In contrast, Mobile Gas Company offered witnesses that defended the return on equity allowed for the utility, as well as the regulatory framework that Alabama’s PSC uses. They cited other states that have followed Alabama’s lead and noted that comparisons of rates paid by Mobile Gas Company customers to rates paid by customers of other natural gas providers aren’t particularly useful, because conditions vary substantially. Even AARP’s experts admitted this was the case, although the organization has routinely cited an article that compares Mobile Gas Company rates to those from companies in places like Mississippi and Georgia. The experts offered by Mobile Gas Company argued that Alabama’s regulatory system provides a great deal of stability in utility rates. Those experts also calculated what they considered a fair rate of return on equity for the utility, which was higher than AARP’s proposal.

The differences of opinion are clear. AARP and their allies want formal hearings and for the PSC to allow Mobile Gas Company a significantly lower return on equity. Mobile Gas Company believes informal hearings are sufficient and believes that its return on equity is just about right. In other words, the technical issues involved are very complicated, but the positions staked out by the parties are not.

The experts in the room, including an expert presented by the Office of the Attorney General, acknowledged that formal rate hearings would take months and cost hundreds of thousands – maybe millions – of dollars. Those experts also testified that their findings would not change, even if the hearings were made formal. That is because this same process has been played out many times in discussions about various utilities from California to Pennsylvania, by the same host of expert witnesses making the same arguments. In some ways, it is a courtroom drama played for years by the same actors with the same script, with only the scenery changing.

The position that PACE expressed to the Alabama PSC couldn’t be more clear: the people of Alabama elect their PSC to decide not what is best for Mobile Gas Company or AARP, or for the lawyers and witnesses, but what is best for customers. The working people of this state just want a fair deal on their natural gas and electricity rates. They don’t care how we get there. They don’t want to endure hours of listening to painfully technical economic arguments from paid consultants and college professors. They don’t require that parties spend millions and sit for months in government buildings to reach an outcome. And they certainly don’t want their state to be the latest spectacle staged by the liberal left.

It’s easy to imagine why the lawyers and witnesses who make a living at lengthy hearings might believe such formalities are essential, but that doesn’t mean that is what’s best for the consumer. It’s also easy to imagine why AARP might see such hearings as a golden opportunity to recruit new members, but that, too, means nothing about what best serves Alabamians. The people of Alabama just want a fair deal on their utility rates. Fortunately for them, if our elected commissioners are faithful to their job description, focusing on the customer and not the commotion, that’s exactly what the people will get.

This is a problem, IEA reasons, because the world’s energy demand is set to grow by 25% within the next decade. Without significant reductions in carbon intensity, the report goes on to state, the world cannot limit increases in global temperatures to less than 2º Celsius, the primary goal of energy and environmental planners worldwide.

So what is limiting the reductions IEA believes are critical? First, despite reductions in coal-fired generation capacity brought on by new regulations and government fiat in Europe and the U.S., developing nations continue to utilize coal for the affordable and reliable power they need. In fact, coal-fired generation actually grew globally by 6% between 2010 and 2012. Nations such as China and India continue to add coal-fired power facilities, a significant percentage of which lack the environmental controls we are accustomed to in the U.S.

Second, nations around the world have stalled on plans to build more nuclear power. As PACE has noted, the U.S.has dragged its feet on crafting a sensible policy on nuclear power. Moreover, organizations such as the Sierra Club – which has opposed nuclear power since 1974 – continues to publicly stonewall the construction of new nuclear plants. According to IEA, construction of seven new nuclear plants began in 2012, but meeting climate targets will require “far more significant construction rates.”

The problem certainly doesn’t appear to be the growth of renewable power. IEA points out that solar photovoltaic capacity worldwide grew by 42% from 2011 levels, while wind power capacity climbed by 19%. Investments in such technology are high, with more than $500 billion spent on renewable power plants in 2011 and 2012 combined. The report is optimistic about the transportation system, noting that sales of hybrid vehicles have passed the one million mark and that fuel economy is improving.

IEA’s solution? In addition to predictable answers such as higher prices on carbon, more energy efficiency, and smarter grids, they also call for more nuclear power and enhanced focus on carbon capture and sequestration (CCS). In total, the IEA report calls for the expenditure of an additional $5 trillion between now and 2020 to achieve the “clean-energy transition.” The report also estimates that carbon prices in Europe need to increase seven-fold to 50 euros per ton of CO2. In other words, IEA reasons, developed nations need to spend lots of money and place big taxes on carbon.

Maybe most curious, though, is why environmental groups in the U.S. consistently oppose policies that IEA deems as critical to stabilizing global energy and reining in global temperature increases, namely nuclear power and CCS technology. Groups such as the Sierra Club and Greenpeace advocate against new nuclear construction, while IEA says a lot more nuclear power is necessary. In the case of CCS, the Sierra Club has argued against a state-of-the-art power plant in Kemper County, Mississippi, that will capture at least 65% of all the CO2 it produces. IEA calls the technology “essential,” while environmental groups do not support such projects.

There is a reason that the public remains largely confused about the direction of energy policy in the U.S., especially as it relates to what impact, if any, that direction might have on climate. It’s not their fault. When the findings of a widely recognized institution such as IEA differ from on-the-ground activism from major green groups, what else should we expect?

In the past four years, EPA has either issued or proposed:

• Sixty-eight rules, constituting nearly 3,000 pages, of Greenhouse Gas (GHG) regulations, which the agency expects to cost between $300 billion and $400 billion annually.
• Greenhouse Gas New Source Performance Standards that effectively shut the door on new coal-fired power plants. In combination with other EPA anti-coal measures, the new standards will shut down an estimated 226 coal-fired power units nationwide, costing up to 250,000 jobs and taking critical baseload power off the grid in 30 states.
• Utility MACT and Boiler MACT rules that will cost industry tens of billions of dollars and endanger economic growth. These rules further endanger baseload capacity by targeting coal-fired power, and place undue burdens on manufacturers of all sizes by requiring costly boiler upgrades.
• New Ozone National Ambient Air Quality Standards (NAAQS) that will cost as much as $90 billion annually depending on the threshold chosen by EPA.
• Cooling Water Intake Structure rules, estimated by the EPA to cost as much as $4.6 billion annually.
• New rules to govern Coal Ash treatment and storage, estimated by EPA to cost as much as $1.4 billion annually for the next 50 years.

Numerous other proposals and regulatory efforts by EPA have been struck down by the court as overreaching. Given her role in creating such a record at EPA, at the expense of job growth and the pocketbooks of power consumers, our nation’s lawmakers should use the nomination process to determine whether Ms. McCarthy plans to continue down the treacherous path EPA has chosen.