Monday, January 03, 2011

The CRI's Wild Math on Delaware's Energy Policy

The Caesar Rodney Institute (CRI) has launched a new series of articles which author David Stevenson promises will challenge the “flawed assumptions” he says underlie Delaware’s energy policies. Stevenson asserts that “if all the legislated policies were in effect now, residential customers would be paying an extra $1000 a year,” without (as yet) providing any basis for the projection.

It’s a tactic that will seem all too familiar to those who remember the fight over offshore wind power, when opponents offered scary estimates of the cost of the Bluewater Wind project as high as $75 per month for residential customers.

Of course, these estimates were not anchored to any disinterested analysis, such as that by the Public Service Commission consultant, which finally projected the levelized cost of the Bluewater Wind contract to be 70 cents per MWh (0.07 cents/kWh) over the 25 year life of the deal. Based on average electricity use, this would come to 65 cents per month or $7.82 per year. (This figure could go up or down a few dollars depending on the trajectory of fossil fuel prices over the next three decades.) Happily, the overwhelming majority of Delawareans who voiced their opinion on wind power didn’t believe the scary numbers.

Since the CRI hasn’t yet shared the basis for its figure of $1,000 a year, I thought I would help out by calculating some benchmarks on residential energy use in Delaware.

According to the Energy Information Administration (EIA), residential electricity sales in Delaware totaled 4,428 thousand MWh (1,000 kWh) in 2008. When divided among Delaware’s 396,222 households in 2009 (U.S. Census Bureau), that comes to 11,175 kWh per home, which multiplied by the EIA’s average residential price for Delaware of 14.18 cents/kWh, comes to an annual bill of $1,585 per household.

Put another way, the CRI is telling us that Delaware's legislated energy policies will lead to an eye-popping 63 percent increase for the average household electricity bill. If we take the the PSC’s projected cost of the Bluewater Wind project of $7.82 per year as a starting point, we are left with a further $992.18 a year that Delaware's energy policies would cost the average household, according to the CRI. Stay tuned.


Anonymous Pat Gearity said...

Good post, Tom. Keep fighting with the truth. I would love to know who funds CRI.

10:37 AM, January 04, 2011  
Anonymous Anonymous said...

My understanding is that CRI gets most of its funding from the State Policy Network.

11:29 AM, January 04, 2011  
Blogger Tom Noyes said...

Good catch; the CRI is affiliated with the State Policy Network:

2:00 PM, January 04, 2011  
Blogger Tom Noyes said...

For administrative reasons I am temporarily shutting off comments.

8:26 AM, January 06, 2011  

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