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Monday, April 19, 2021

Your Vote Determines Your Electric Rates

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David Stevenson
David T. Stevenson is the director of the Center for Energy Competitiveness at the Caesar Rodney Institute. He holds a B.S. in agricultural economics from Rutgers University, and is founder and president of One Call Services, Inc., a home remodeling company. In his twenty-three years at DuPont, Dave worked with both economic and technical issues including serving in technical service, business management and new business development. His areas of focus included pioneering work in the production of photovoltaic cells and wind turbines, and work on new battery designs. Dave has started four successful businesses since leaving DuPont and they are now run by family members. He helped start a mentoring program for entrepreneurs at the University of Delaware, is an "angel" investor with First State Innovations, and helps analyze new business opportunities. He was a founding member of Delaware's Green Building Council.

People who live in more Democratic-leaning states often pay higher electricity rates, and this is not by accident.

The most liberal leaning states, with policies designed to curtail conventional power plants, have electric rates over twice as high as the most conservative leaning states. For example, a voter in Connecticut using the same amount of electric power as a voter in Utah would pay $800 a year in higher electric bills. It also means high power cost states will be passed over in a manufacturing revival bringing good middle class jobs back to U.S. shores.

States on the Pacific and the Northeast coastal tend to have policies that raise electric rates.  The phased in nature of many of these policies ensures the difference in electric rates by state will continue to grow by as much as 20% in the years to come. Although most states, Republican and Democrat leaning have renewable energy standards, liberal leaning states have more aggressive requirements for expensive renewable power sources like wind and solar, which have been receiving government subsidies for years yet still cannot compete in the free market economy with other forms of energy like coal and natural gas.

Liberal-leaning states and counties are often slow to cite, and allow for, new conventional power plants. Many of these states have an unfriendly regulatory environment for conventional power plants. Some of these localities have economy-slowing carbon taxes, ranging from $5 per ton of CO2 produced in Montgomery County, Maryland, to carbon taxes on residents, businesses, and industrial customers in Boulder, Colorado. Last November residents in Boulder County voted to keep their carbon taxes where they are, which range from $21 to residents to nearly $10,000 for industrial customers.

The eleven highest cost states cluster between about $35 and $50 per million BTU’s (energy needed to heat one pound of water by one degree Fahrenheit) and average 61% higher at $40/Million BTU. In addition to the policies described above, these liberal state governments believed they could punish power plant operators by de-regulating prices for the electric generation portion of electric bills. Previously power plant prices were regulated by government run Public Service Commissions to protect the massive infrastructure investments required to disburse electric power to everyone while protecting against monopoly pricing. Price de-regulation was a trendy issue in the late 1990’s that supposedly would force utilities to compete and lower prices but really just gave the power plants, with essentially captive customers, the opportunity to raise prices.

Bottom line: Citizens should oppose energy policies which drive up the cost particularly for the middle and working class, such as carbon taxes, subsidies to “green” companies, and instead should push state and Federal legislators to allow more natural gas development and more conventional power plants. If renewable energy is meant to be, the free-enterprise system will let the best ideas succeed and get rid of the government cronyism.

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Latest News

Delaware passes 100,000 COVID-19 cases

The number of variant cases continue to rise, but the state only tested 92 samples last week.

Spartans use big fifth inning to hold off Sallies at Frawley 6-4

Christian Colmery pitched 5 innings of shutout ball

Help biodiversity by picking up native plant each time you go to nursery

Gradually adding natives to a garden will help it begin to add more to the state's biodiversity
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