Talk About Spin -- Utilities Raising Rates to Pay for Infrastructure Modernization

Link here.

This is what they are telling you:

From Alaska to Georgia and Wyoming to Florida, utilities are seeking permission to pass on hundreds of millions of dollars in new charges to customers to help upgrade aging infrastructure and build new or retrofitted power plants that comply with tougher environmental regulations, a Daily Beast review of regulatory filings has found.

This is accurate but the emphasis is interesting: "to help upgrade aging infrastructure" takes precedence.

In fact, the increased utility rates have more to do with Federal- and state-mandated requirements for inefficient renewable energy (I've blogged so often about it, I won't look for links now) than with aging infrastructure. Starting back in 2010 or so, many states started mandating that utilities produce 20 percent of their electricity from "renewable" sources, such as wind or solar. Minnesota even took the unusual step of refusing electricity from the Dakotas if it came from coal-powered sources. That decision ended up doing two things: a) putting the kabosh on a new power plant in South Dakota; and, b) raising electric rates for Minnesotans.

Point: if there is an "aging infrastructure" issue, it has been worsened by crazy requirements that utilities use less efficient sources, such as wind, to provide for electricity (don't even get me started on the inefficiencies of solar). For the past two years when the utilities could have added hundreds of thousands of jobs tackling "aging infrastructure," and working to keep electric costs down, they've been saddled with putting up whooping crane-killing turbines.

I recall very recently that Minnesota has agreed to purchase electricity from the Dakotas now even if it is coal-generated. I don't remember the specifics.

On another note, the writer uses the phrase "to pass on hundreds of millions of dollars in new charges to customers" which again is absolutely true. What the writer does not tell you is this: a) the utilities, in exchange for being regulated, are allowed to recuperate their costs by law; and, b) the utilities seldom get what they request.

The second point is very, very important. By not getting their requests at the front end, the "can is kicked down the road" and over time, the requests become larger and more difficult for the state regulators to deny. The utilities won't upgrade or increase capacity if their costs are not reimbursed.