From 2002 to 2019, residential electricity rates have been rising. Yet another EIA data table shows that the cost of producing electricity has been declining over the years. (From the U.S. Energy Information Administration EIA website)
“Renewable energy” sounds great, but at what cost to people and society? Charles McConnell, former deputy secretary of energy in the Obama administration, produced a short video for Prager University (PragerU) in February, “Why Electricity Costs So Much,” and posted it on YouTube. PragerU is not a real university, but a nonprofit organization that produces short explainer videos to promote conservative ideas.
In the video, McConnell gets right to the point and says, “Since 2010, the price of natural gas has fallen 43 percent and the price of coal has fallen 11 percent. However, the price of electricity for U.S. residents has risen by 13 percent over that period.
Why are the costs of producing electricity falling while your rates keep going up? (See data from the U.S. Energy Information Administration at https://www.eia.gov/electricity/annual/html/epa_07_04.html for details)
“Because almost all of the money the American people should have saved (and it’s a lot of money) is going to subsidize renewable energy. It turns out that wind and solar are more expensive than advertised.” McConnell said the main federal subsidy for renewable energy is the Renewable Electricity Production Tax Credit (PTC).
However, long before wind and solar were considered “critical to the environment,” harmful pollutant emissions in the United States had been reduced by 77 percent since 1970, almost entirely due to a switch from coal to natural gas.
According to the EPA website, “Today, fine particulate air pollution is no longer a major problem in much of the United States. The average level of air pollution in the United States is now about one-third of what it was in 1970.”
So, if we’re not getting the cost savings from wind and solar, and the benefits in terms of cleaner air and CO2 reduction are minimal, why are we so obsessed with it?
Why is electricity so expensive?
McConnell points out that if you take a closer look at your own electricity bill, the problem becomes even more acute. It’s made up of three main parts, Part 1: The cost of generating electricity. Part 2: Transmission costs. Part 3: Taxes and fees.
Part I: Cost of electricity generation. Fossil fuel electricity is cheap, and the fuel can be stored and obtained locally – electricity is available when you need it. But sunlight and wind are not always available, and to rely independently on these intermittent sources of energy would require building more wind and solar power plants to produce excess energy when the sun is shining and the wind is strong; it would also require building huge energy storage systems to store electricity for later use.
In addition, long-distance transmission lines will have to be built to deliver electricity to places across the country where it is needed. This involves the second part: transmission costs.
The cost of transmitting electricity depends on the distance between the power station and your home or business. That’s why, McConnell explains, fossil-fuel and nuclear power stations are well-suited to powering huge, dense cities and industries. They require only a small amount of land space and can be built close to or in the center of the population, so they require relatively few transmission lines. But wind and solar resources require large tracts of land and are therefore often built in remote areas.
That’s why on March 31 of this year, the U.S. White House website released the Biden “Infrastructure Plan,” another $2.3 trillion infrastructure plan to focus on new energy generation, energy storage, new energy vehicles, power grids and other support, pulling unprecedented efforts.
Building a new infrastructure for power transmission across the United States is very expensive. Citing Texas as an example, McConnell said more than $7 billion has already been spent on new transmission lines, and additional billions will be needed to send distant wind energy to cities in the east and south. Texans are already seeing these costs on their electric bills. But Texas is not an exception; it’s everywhere.
Eliminating subsidies makes green energy uncompetitive?
Part 3: Taxes and fees. You won’t see the federal taxes you pay on your electric bill, and in many places there are state taxes that are used to subsidize wind and solar power.
McConnell says federal subsidies for the wind and solar industries alone add up to more than $70 billion from 2010 to 2019. Most state governments also include their own incentives. Wind and solar subsidies have been around for decades,” he said. We’re not incentivizing new technology, we’re artificially propping up an industry. Eliminate the subsidies and there’s a good chance this industry will cease to exist.”
In addition to decades of continued federal and state subsidies for “green energy,” New York City Mayor Michael White and Comptroller Stenger announced in January that New York City pension funds would divest about $4 billion worth of securities from the fossil fuel sector. New York State Comptroller Thomas DiNapoli also announced that New York State’s $226 billion pension fund will reduce its holdings in many fossil fuel stocks over the next five years.
So to sum up, for producers, this is a continuation of sky-high subsidies for “green energy” on one side, and a payback for conventional energy on the other. For consumers, the cost of electricity generation, transmission costs, taxes and fees …… you pay far more than you should. “While, wind and sunlight are free, wind and solar are not.” McConnell said.
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