Todd Wynn
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Renewable Energy Costs for All
By Todd Wynn

 
Portland General Electric (PGE) customers may have noticed something new on their bills recently. Last month, a “renewable resource adjustment” was added to electricity bills to pay for additional renewable resources like wind power. Even if you are not enrolled in the Green Power Program, all PGE customers are forced to pay for renewable energy. According to PGE, ratepayers can thank their legislators for this added electricity cost.

In 2007, Oregon legislators passed a Renewable Portfolio Standard (RPS), forcing major utilities to procure 25% of their electricity from new renewable resources by 2025. With much fanfare, Governor Kulongoski claimed that this would be “protecting ratepayers with more stable and predictable utility rates.” Environment Oregon also claimed that ratepayers will save money by having utilities invest in wind energy instead of in fossil fuels. They were wrong.

Despite the existence of a voluntary program which allows renewable-resource-loving ratepayers to pay a higher cost to support renewable energy, PGE is charging all of its customers a higher rate for the added renewable energy on the grid by charging 0.22 cents per kWh, or approximately $2.13 extra per month, for an average household. But this is not all; PGE has requested to raise rates an additional 7.4%, or approximately $6.70 more per month, for an average household. Part of this rate increase is due to the expansion of the Bigelow Canyon wind farm that will help meet legislative mandates.

Despite promises by legislators and environmental organizations, renewable energy has increased rates and will continue to raise them even higher. Unfortunately in Oregon, all ratepayers are forced to pay for the costs of renewable energy whether they value it or not.

Todd Wynn is Climate Change and Energy Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

4 thoughts on “Renewable Energy Costs for All

  1. Todd,
    The assumption is that there IS renewable energy. The cheerleaders of wind power tout the MW of CAPACITY, but OUTPUT is the what the legislators require. Unfortunately, the wind blows more steadily in Salem than east of the Cascades! From the BPA website: http://www.transmission.bpa.gov/business/operations/Wind/, we find this data…”The installed wind capacity during this time [last 56 weeks ’09] was ~ 3% of capacity. The full 56-week average was ~ 23 %, that is, nearly a quarter of the time the total wind gen was less than 3% of total wind capacity.
    Other than the very low wind gen period this month, the weeks of 1/21/08 (55.0 %) and 10/27/08 (53 %) had the next greatest frequency of low wind gen periods.
    There was a slight seasonality, with the fall months having somewhat more “very low wind gen” periods. These very low wind gen periods highlight the high correlation (i.e., low diversity) among wind gen plants within the balancing authority area.”

  2. Todd,
    How about discussing the issue of environmental externaities in addition to pounding the individual liberty drum? You might even go outside traditional economic theory and discuss the equity considerations related to power production. Or, is your main point that my neighbor ought to be able to do anything he wants regardless of its im pact on me or my property? Sounds to me like the RPS standards is where it belongs; in the political domain. If ratepayers don’t like the energy policy they have ample opportunity to change it next election.

  3. Additional facts about wind. Since the distant coroporate owners of the wind mills demand that they recieve tax credits when ever the wind blows, as a result BPA and PacifiCorp system must run damns and coalplants that would otherwise be near idle just so that they have something to back down if the wind comes up. The result s that the hydro system is devauled by running light load hours an diminishing the amount of quantity of load that can be served during the most valuable heavy load hours when industry and demand are at their daily highs. Also PacicifiCorp runs their coal plants harder so they have something to back down if wind comes up. In the long run it would save cutomers money and inprove air quality if the wind pushers could just be told “we don’t need your wind megawatts right now”.

  4. PDXXPD,

    Alternatively, the smart grid could be used to make demand flexible to supply. When there is wind, we use it. When there is not, we don’t. In this high tech day-in-age, We can load-shift, without even feeling it, as the consumer.

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