This is the second in a two-post series on electricity prices as impacted by deregulation and renewable energy penetration. Last week we explored deregulation in Regulation v Deregulation in True Color. This week, we examine the effects of increasing shares of renewable energy (like wind) being added to the grid. Again, the source for all this information is the U.S. Energy Information Administration, so you can fact check away! To recap, we are examining four regional markets as follows: Regulated Midwest states of South Dakota, Minnesota, and Iowa Deregulated Midwest states of Illinois, Ohio, and Pennsylvania Deregulated Texas Deregulated and…
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In April of this year, I commented on the Center of the American Experiment’s report, Energy Policy in Minnesota: The High Cost of Failure. That post is here. As a wee lad, I liked Curious George, so let us dig in and see if we can tweeze the fibers that drive the cost of electricity. Wind and Electricity Prices American Experiment’s claim is that wind energy with near-zero marginal cost of production does not result in lower energy prices for consumers. In fact, they say it increases electricity prices. This is where I began. Data for this post come from…
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On the subject of electricity generation sources and price, I’ve been reading numerous articles from various bona fide sources and started connecting dots. Public Utilities Fortnightly (PUF) has written about historically low electricity prices, as a percent of GDP or household spending, numerous times in the past year. Electricity price escalation has not kept pace with the consumer price index. As of last August, Steve Mitnick, of PUF shared data, which I plotted on the chart below.A year ago, I wrote about this topic as well in Low Electricity Prices - For How Long?. In that post, I explained how…
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What is the purpose of the Clean Power Plan? To reduce emissions to 30% below 2005 levels by 2030? No. It has major flaws for actual, as in reducing tons of carbon dioxide release to the atmosphere, but I will come back to that later. As reported in Clean Power Plan Coma Phase, the country is already half way to the CPP goal, and it hasn’t even taken hold yet. Instead, it has begun the decades long legal battles with an initial vote of confidence handed down by the Supreme Court. How did we achieve 50% of the progress already?…
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New ideas are great, but there is no replacement for accumulated experience to assess the landscape ahead and see potential trouble on the horizon. This is one of my most important responsibilities for our company. I am no mountain climber, but I am reminded of mountaineering documentaries about summiting Everest and getting past the treacherous Hillary Step. Just last week, I met with a team of engineers cautioning them about crucial steps in the progression of a project that would make or break the project. It involved a combination of technical factors and human factors.Too bad there is no empowered…
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As we march along with the nation’s rather massive build-out of renewable energy resources, questions emerge for how to fill the gaps when the sun sets and the wind stops blowing – i.e., when it’s nice to be outdoors, especially in the summer. So there you have it – turn off the lights, grab a drink and go out on the deck to hang out with your friends and family. Now there is a behavior program to get behind! Patent underway. Unfortunately, the discussion is focused on energy storage rather than “quality time”, a term that predates “work-life balance”. Once…
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Last week, I mentioned that having a diversified fleet of power generating plants is a smart strategy for any utility; specifically, diversity by fuel source. The recent natural gas bonanza cut loose with the perfection of hydraulic fracturing and mind-blowing drilling capability (vertical a few thousand feet, then horizontal a few thousand feet) has unleashed a fury of kneejerk policy and utility strategy changes. As is common with the Energy Rant, Jeff says, not so fast. It isn’t that easy. There are consequences and major challenges with racing down this road without thinking.First we have the federal government (the EPA)…
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Easy peasy lemon squeezy, to repeat a phrase of one rant fan a while back – that describes carbon slayers’ victory laps in the past couple years. I am talking about the natural gas boom introduced by the development to near perfection of the hydraulic fracturing and horizontal drilling methods used on private land, mostly east of the Mississippi River. Pile on top of this last Monday’s release of the EPA’s carbon goals by 2030, and we have about three or four weeks of blog material. So, let’s get started. Natural gas is a wonderfully versatile energy source. It doesn’t…
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I’ve come to realize over the course of many years that the electric utility business is fascinatingly challenging. No other industry that I can think of has more bosses than an electric utility. In fact, high ranking utility people promoted from Executive Vice President to President/CEO leave a job with one boss and accept a job with dozens of bosses. A utility must take orders from Washington. Recently, the Supremes overturned a lower court ruling that effectively said, Michigan, you don’t have to listen to New Jersey to set limits on your emissions. Now Mr. CEO, you do.The utility pleas…
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Provide a chimpanzee with a computer loaded with MS Word and some sort of reward for pounding on the keyboard, and sooner or later it will produce a sentence, probably consisting of two words: subject, verb. Provide a workbook with a one-trick-pony energy calculation to an unqualified user who applies it to a scenario it doesn’t represent whatsoever, and they may return the “right” answer, once in a while. Allow 536 mostly clueless individuals to craft laws and policies, and sooner or later by unintended consequences, they may achieve an objective. And so it goes with automobile fuel economy standards,…
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