Electric Rates Could Be Dropping Significantly, Except For One Reason: States Mandate Intermittent Energy At 10X The Cost -- January 28, 2016

Updates

January 29, 2016: this is a most incredible graphic, from the Wall Street Journal. Take some time studying it -- electricity costs, already cheap in the US, dropped another 15 - 30% in many areas of the country. But someone is going to have to ask Houston if there's a problem. Why is the price of electricity going up in Houston?

Original Post

 

From the linked story below: electricity now costs about 3.5 cents per kilowatt-hour. That compares with an average wholesale price of about 7.6 cents a kilowatt hour for 2008, when gas prices were much higher.

If you are paying more than 3.5 cents kilowatt-hour, ask your utility company how much wind energy you are paying for. Good luck.  

If you want to save a few bucks/month on your utility bill, install a $35,000 solar system on your roof. LOL. 

From yesterday's Wall Street Journal:

The lowest electricity prices in more than a decade are testing the whole business model of independent power-generation companies.

While most companies are thrilled when their fuel costs drop, plunging natural-gas prices have pushed wholesale electricity prices down to rock-bottom levels. That trend is pressuring the sales and stock prices of some of the biggest power-plant owners in the U.S.

Shares in Dynegy Inc., Calpine Corp. and NRG Energy Inc. slid more than 55% last year. So far this year, they are down between 4% and 19%. Last month NRG’s board of directors replaced longtime chief executive David Crane, hoping change at the top would reverse the company’s slippage, but there is no relief in sight.

A U.S. Supreme Court decision this week put additional pressure on generators’ stocks with a ruling that allows big consumers to receive payments for cutting their electricity use that are equivalent to what generators are paid to make electricity. 

Good, bad, or indifferent, this is what caught my attention:

The companies mostly burn coal and natural gas to generate electricity, but it is gas prices that often dictate electricity prices in places like California, Texas and the northeast. That is because the country’s fleet of power plants has dramatically changed over the last 20 years to run on more gas as coal plants have shut down due to old age and new pollution regulations. Today nearly 30% of U.S. power is generated from gas, up from less than 20% two decades ago.

The average U.S. electricity price last year fell by about a third to 3.5 cents a kilowatt-hour, according to a Wall Street Journal analysis of statistics compiled by Intercontinental Exchange Inc. In December, as gas prices hit a 14-year low, the price in some regions was even lower. In the mid-Atlantic power sold for a little as 2.7 cents per kilowatt-hour, according to federal data.

That compares with an average wholesale price of about 7.6 cents a kilowatt hour for 2008, when gas prices were much higher.

3.5 cents/kw-hour. In the mid-Atlantic, for as little as 2.7 cents/kwh. As a rule of thumb, I usually think of 6 - 9 cents / kwh. Because that's what it was back in 2008.

Solar / wind energy? You can't get an honest answer. Too many variables, but 20 - 30 cents/kwh is probably as good a number as any for intermittent energy. Remember, when you suggest otherwise, that intermittent energy needs back-up fuel energy to provide energy at night and when the wind does not blow.

So, for folks who like to pay intermittent energy, they can pay 30 cents/kwh for intermittent energy vs 3 cents/kwh for reliable energy. The only reason our utility bills are not 10x what they are is because utilities manage somehow to limit intermittent energy to only a small percentage of their overall fuel. But if you like solar/wind/intermittent energy, be prepared to pay a utility bill ten times what you are already paying.