Guest essay by Eric Worrall
Green energy advocates are lobbying the Maryland legislature to overturn Governor Larry Hogan’s veto of a Green Energy Bill, which would have imposed rate rises on Maryland residents.
Clean-energy backers rally for override of Hogan veto
The sponsors of legislation that would increase the amount of energy Maryland utility customers get from renewable sources called Thursday on the General Assembly to override Gov. Larry Hogan‘s veto of that bill.
The legislature could consider overturning Hogan’s veto as early as next week, when lawmakers gather in Annapolis for their annual 90-day session.
The governor showed this week he was ready for a fight on the issue. He labeled the measure a “sunshine tax” because it would — for a period of years — require rate increases to pay for the additional cost of wind and solar power.
Proponents countered that the increases would cost ratepayers no more than 58 cents a month. They argue that the extra costs would be temporary and would be offset by a boost to Maryland’s economy caused by increased investment in “clean energy” jobs.
Kevin Sheen, spokesman for the solar and wind power company Empower, estimated rates would be slightly higher for five to seven years before savings outweigh costs.
Amelia Chasse, a spokeswoman for Hogan, said the governor has consistently supported efforts that promote clean air and clean water. “However, the governor will not do this at the expense of Maryland’s ratepayers,” Chasse said.
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Read more: http://www.baltimoresun.com/news/maryland/politics/bs-md-renewable-rally-20170105-story.html
If green energy is cheaper than fossil fuels, why do proponents always seem to demand mandatory targets and higher rates and fees? Surely they could finance any upfront costs for their product by borrowing against the “savings” they claim will accrue.
Let those who believe in renewables make their case with people who actually want their product, like a normal business, instead of continuously attempting to use political influence inflict their corporatist rent seeking on the general public.
Dear all,
there is something i have not seen discussed on this blog before which i would like to bring to everyone’s attention.
It is something quite hidden in the cost calculations for Electricity generated from Natural Gas but does have a profound impact on the resulting E price.
It is the variation (or swing) in the gas consumption rate of the power plant and its effects on the fuel cost.
Gas suppliers (like everyone else) like to know how much you need and when you need it, so they can plan their supply and demand.
Based on those two gas suppliers will give you a price for the connection and the gas itself.
For a “swing” E-producer / Gas-consumer you get the worst possible scenario of a rather large consumer coming and going at unexpected times.
The gas grid itself has many more opportunities to cope with large swings in supply and demand when compared to the E-grid so grid stability is generally not a big issue, but the price you pay for this type of contract is much higher than for a nice and steady (base-load) contract.
In Europe i have seen prices for the gas 50% to 150% higher for irregular consumers when compared to more base-load consumers, but this was some time ago (2008) and is very site specific because it generally is a one on one contract between the power producer and the gas supplier. So its difficult to make a general estimate of how much more expensive the irregular contract and resulting E-generating cost would be.
Anyway, the point is that using base-load GT power generation costs to fill the supply gap when sun/wind are not producing is highly misleading as no one will supply you the gas for the low base-load cost.
Futures markets helps smooth out that problem. Food companies do that with grains. Farmers get a set price on given amount ensuring a profit and the food companies get the grain at a price that smoothes out whether a particular farmer experiences a drought or flood. Most commodities work like that. When fuel prices were heading towards the sky, airlines were locking in fuel prices. The fuel companies are obligated to supplying so many gallons of fuel at a set price.
This entire discussion on climate change is based on future weather. Fortunes are made and lost on knowing or having a reasonable idea of when floods and drought occur, how long and how severe. Degree heating days or cooling help the utility companies prepare for extreme cold or hot. They can plan using the capacity of the system and the type of energy used. Then there is clothing, do you make more coats for a long winter or more shorts and tank tops. Retail is affected, as well as restaurants. Road departments need to know how much salt, road crews. The same snow in New Jersey has a completely different outcome in Georgia.
Huge swings within short intervals are possible due to unexpected events. However, if they occur frequently, the market isn’t working correctly. The reason futures markets work so well is the fear of uncertainty. You don’t know and if you have an idea, you are hedging against future short falls, ( or over supply) and you have an advantage against your competitors.
When Hurricane Katrina hit, shortly thereafter Al Gore was giving his now infamous speech on more frequent, severe storms. ” This is the new normal, get use to it. ” Insurance companies in response raised rates to meet the expected disasters. Have you seen the rates go down in response to fewer, weaker storms ?
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Wind and solar use subsidies exclusively for capital expenditures, then operate independently for 30+ years. Fossil subsidies go toward operations (capital expenses related to fuel extraction are really operations). The useful measure is Levelized Cost of Energy, and by that measure wind and solar are already comparable to coal and some gas.
Direct subsidy calculations typically exclude indirect subsidies for fossil fuels, such as personal healthcare expenses and damage from sea level rise and climate change-related events. Absurdly favorable land leases are another often overlooked.
The “sunshine tax” rate hike is only necessary because the utilities refuse to stop investing in cash-cow fossil plants. If they had planned years ago for widespread renewables adoption, they would not have so many stranded assets that they feel entitled to earn a profit on in spite of the harm they do, and rates would actually get lower as more solar and wind came online.