Monday, February 14, 2011

The CRI Asserts Renewable Energy Policies Hurt the Poor

We are taking money from the poor and giving it to the rich! Misguided energy policies have put the state in the role of the anti-Robin Hood.
Like most of the CRI’s arguments against renewable energy, we heard this one before. During the Bluewater Wind debate three years ago, we heard that the poor couldn’t afford wind power and its requisite “green premium.”

The green premium this time is said to be at least 20 percent of household energy bills—though once again no analysis is offered to justify the number. Reference is made to the Regional Greenhouse Gas Initiative (RGGI) and Delaware's renewable portfolio standard, without offering any analysis as to how—and how much—these programs will raise our energy bills.

Actually this version of the green premium is rather modest compared to a previous assertion that
renewable energy programs would cost $1,000 annually per residential customer “if all the legislated policies were in effect now.” As I calculated last month, this would come to a whopping 63 percent of the average residential bill in 2009. Whether the number is 20 percent or 63 percent, the CRI doesn't show us the analysis to back up the scary numbers.

Since the CRI seems disinclined to do the math, I thought I would take a stab at it, starting with Delaware’s biggest renewable energy effort: the Bluewater Wind offshore wind project. The Public Service Commission’s consultant in 2008
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 in 2009, 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.) For those keeping score at home, that comes to 0.49 percent—which leaves the CRI to detail how renewable energy policies will raise our bills the other 19.51 percent.

4 Comments:

Anonymous Anonymous said...

"We are taking money from the poor and giving it to the rich! Misguided energy policies have put the state in the role of the anti-Robin Hood. " (CRI)

The conservative Caesar Rodney Institute (CRI) statement is correct in describing present day fossil fuel usage.

Anti clean energy is always backed by corporate fossil fuel users.

I am interested in the different rates charged commercial and residential electric users.

Could you list the present day rates differences here, TommyWonk?

8:41 AM, February 17, 2011  
Blogger TommyWonk said...

The average rates by customer category in 2008 according to the EIA:

Residential 13.93 cents/kWh

Commercial 11.21 cents/kWh

Industrial 10.45 cents/kWh

9:04 AM, February 17, 2011  
Blogger TomFrueh said...

Our electricity bill will not go up 20%. I believe there is a provision in the DE legislation that limits the amount green energy can raise electricity bills to 4%. If the green energy purchases raise bills any more than 4% suppliers can revert to conventional fuel supplies.

10:39 AM, February 17, 2011  
Blogger TommyWonk said...

There is a provision in the RPS bill (SS 1 to SB 119) that provides a circuit breaker of sorts if renewable energy drives prices up by more than 3 percent in a year:

"The State Energy Coordinator in consultation with the Commission, may freeze the minimum cumulative Eligible Energy Resources requirement for regulated utilities if the Delaware Energy Office determines that the total cost of complying with this requirement during a compliance year exceeds 3% of the total retail cost of electricity for retail electricity suppliers during the same compliance year."

The Renewable Energy Taskforce has not had a detailed discussion of how that would work.

11:34 AM, February 17, 2011  

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