This is the third and final post in a series of Energy Rants on rising electricity prices and unreliability. The first post, Rising Price of Less Reliable Electricity, defined and quantified the problem and discussed some reasons and challenges in the future. Last week in Electricity Rates and Reliability, I started with a state-by-state analysis of energy efficiency policy, electricity sources, and prices. My research for those two posts tipped off an avalanche of rich data to analyze. This week, I am polishing it off with a grand finale featuring state rankings for composite clean, reliable, and affordable electricity. Electricity…
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The depth of decarbonization will ride the line where the net of cost and convenience meets that of conventional alternatives. Polling from the University of Chicago indicates 38% of Americans are willing to chip in one (1) dollar per month to fight climate change, down fourteen percentage points from 2021 (presumably, that 14% are willing to pay nothing now). Or, as one Wall Street Journal article noted in November, “Someone has to pay for it, and shareholders and consumers decided this year it wouldn’t be them.” For instance, I like to cut, split, stack, haul, and burn wood for heat. It must burn hot…
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Last week, we looked at Total Resource Cost (TRC) tests that were developed decades ago to put a high value on avoided source energy costs. That was right for the time, but not today. I demonstrated that energy costs, mostly dominated by natural gas, are near historic lows, while zero-energy-cost renewables supply more electricity than coal-fired generation. Of course, renewable sources have zero source-energy consumption. Yet, utility commissioners are laser-focused on keeping electricity prices in check and maintaining the reliability of the electric grid. Electric Rate Basics Like the TRC, most utility rates (tariffs) are stuck in the 1970s. I…
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This week I’m focusing on the concerns expressed by members of the National Association of State Utility Consumer Advocates, NASUCA, which met in parallel with NARUC in Austin, TX, a week before last. The topics of concern include outage risk, high prices, and related energy poverty. Outage Risk In the short term, this year or next year, I can only repeat what the experts are saying. Jim Robb, President of the North American Electric Reliability Corporation (NERC), said the bulk power system has seen steady improvement . At the same time, the risk is “terrifying” due to peak load growth…
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Lazard recently released its 16th levelized cost of energy or LCOE report. The LCOE represents the total cost of generating (or storing) electricity over the asset’s life divided by the total MWh or kWh delivered. The total cost includes construction, land, operations, maintenance, fuel, interest, etc. Questionable Comparisons The LCOE can be misleading, it's like comparing the levelized cost of transportation (LCOT) of a bicycle, automobile, and passenger jet. The LCOE only applies when comparing automobiles against automobiles, bikes against bikes, etc., for obvious reasons. Similarly, LCOE for electricity storage is mostly reasonable. However, comparing LCOE of renewable power generation…
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East of the Mississippi, we haven’t had a heat-induced stress test of the electric grid for a long time. I don’t remember names, but I remember weather events, places, and numbers well. The hottest summer of my life was 1988, with many days over 100F throughout the summer (every month). Many records fell, and several times on consecutive days. It was relentless. The next steamiest summer was 1995, while I was in graduate school in Madison. The temperature peaked at around 117F with a staggering dewpoint over 80F. It's bad when sunglasses and bicycles fog over when you take them…
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In my Personal Finance class as an undergraduate, our instructor used the term diworsification for large stalwart companies. Diworsification occurs when a company buys another company it knows nothing about and isn’t complimentary to the core business. Utilities got into this in the wild west days of 1990s deregulation, buying telecommunication and even real estate companies. That didn’t end well, and they went back to their core business of the regulated monopoly.In recent years we have experienced a reverse diversification of our power supply – namely in the reliable, conventional, thermal power plant sector. We still get almost half our…
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