Skyrocketing Electric Rates Version 2.0: The Major Problem

This week President Obama attended the Global Leadership in the Arctic: Cooperation, Innovation, Engagement and Resilience or GLACIER Conference in Anchorage. Afterwards he toured Alaska to highlight what he views as the dangerous effects of “climate change,” although Alaska temperatures have changed little in the last century. The most important thing that happened at the Conference was that Russia, China, and India refused to sign a declaration at the end of the Conference pledging to support “fighting” global warming in the Arctic and the proposed Paris climate accord, reportedly because of the costs this would impose on them. This surely does not augur well for Obama’s preferred outcome from the December, 2015 UN COP in Paris and suggests the major problem with Obama’s EPA power plant regulations.

The remainder of Obama’s Alaska trip was an attempt to crank up the White House propaganda machine on the basis of wildly exaggerated claims as to the extent of present and future climate change and its effects. He apparently hopes that this will improve the chances for a “favorable” outcome of the UN December Paris COP and even persuade the American people to spend trillions of dollars to arbitrarily reduce US carbon dioxide emissions, as he has decreed in recent EPA regulations. The real problems, however, are caused by Obama’s/EPA’s misguided response to the alleged effects of slightly higher CO₂ levels on “climate change”/”extreme weather,” not the supposed “climate change”/”extreme weather” allegedly caused by slightly higher CO₂ levels.

Obama’s Promised Skyrocketing Electric Rates

In 2008 President Obama said that “electricity rates would necessarily skyrocket” as a result of his proposed (soon defeated) cap and trade/tax proposal. EPA’s August 3, 2015 regulations will finally accomplish his 2008 prediction. He calls them his “Clean Power Plan” or CPP, but I call them the Skyrocketing Rates Power Plan or SRPP. Besides the higher costs of the wind and solar generating plants promoted by the SRPP, the SRPP has many other problems, includimg its gross illegality, its lack of measurable benefits, and others I have previously discussed.

The most important thing to understand about the SRPP, however, is that it will end up costing US businesses and consumers dearly since electricity costs will indeed skyrocket, just as they would have under cap and trade/tax. Taxpayers will also end up paying the increased subsidies that wind and solar installations unfortunately receive. These increased rates and subsidies are the major reason that a number of Western European countries that have already adopted similar policies are pulling back. British Prime Minister David Cameron, for example, has recently decided to greatly reduce subsidies for wind power and is reported to have said “Get rid of all the green crap.” He apparently understands what the effect of increasing electricity prices will have on the next election if he does not act. Maybe this is why Obama postponed his SRPP until after his last election.

The Dubious if Not Imaginary Benefits

Obama, EPA, and climate alarmist organizations have no end of dubious or more likely imaginary alleged benefits from the SRPP’s very high cost non-hydro “renewable” sources of electricity. But they are always highly uncertain and in the far future other than the profits of the wind and solar industries, which start immediately. The effects on global warming will clearly be unmeasurable even using UN “science.” I argue that consumers and taxpayers will never be able to measure or even specify exactly what these benefits will be (or have been even after the fact).

When and if consumers and taxpayers understand what these costs are, the SRPP is dead, just like its now deceased predecessor, the cap and trade/tax bill of 2009-10. As discussed previously, European experience suggests that US rates are likely to increase between three and four fold. Yet EPA falsely claims that the SRPP will save consumers money. The reality will eventually show up in everyone’s electric bills, but the Climate-Industrial Complex (CIC) hopes that no one will notice until the inexpensive, reliable fossil fuel generating plants have already been shut down before their time and it is too late to avoid the huge costs of building ugly, environmentally damaging, and unreliable wind and solar generating sources of electricity.

The cap and trade/tax bill in 2009-10 died because the costs were readily understood as to their effects on ratepayers and legislators had to vote for it to become law. This time the costs will also primarily be in the form of much higher electric rates, but through protracted, complicated behind-the-scenes negotiations between EPA and the states. The result is the same in terms of who will pay but legislators did not have to directly approve it. Hopefully consumers will recognize that this is a distinction without a difference in terms of the effects on their pocketbooks before it is too late to stop it, and will inform their representatives in Congress to act accordingly and in states to just say no to cooperating with EPA. Unfortunately, it appears that the public does not currently understand this. The Congressional Review Act votes on the SRPP are likely to occur before consumers realize what is being done to them, this time through an EPA regulation rather than a proposed act of Congress.

Increases in the cost of a necessity such as electricity will force those who are living up to their incomes and lack any savings to either reduce other expenditures, such as on health care or food, or use less electricity. Those few wealthy enough to have ample savings or discretionary spending will not be much affected by the coming electricity rate increases. Low income families are likely to oppose rate increases once they understand what the Obama Administration has done through its SRPP regulations. Unfortunately, the Administration has not told the public what is going to happen, and even makes false statements about its effects on ratepayers.

Obama’s/EPA’s Refusal to Learn from Western European Experience

The high cost electricity countries of Western Europe, particularly Germany and Denmark, show what will happen. These results are not based on carefully manipulated computer models; this is real life experience. German electricity costs are now three times higher than in the US, primarily because of the construction of “renewable” generating sources. California electricity costs are roughly 50 percent higher than before wind and solar were mandated, and the costs are still ramping up as the mandates ramp up. In other parts of the country except the Far West, the costs of using non-hydro “renewables” will be far higher since there is little hydro that can be quickly brought on line to prevent blackouts when the wind fails or the sun sets or goes under a cloud. The rest of the US is more like the Western European nations since they have little hydro so must keep most of the current generating capacity on standby at double or more the cost.

An interesting footnote is that Denmark actually has access to hydro from other Nordic countries, but they pay dearly for such versatile power from their Nordic neighbors. So Denmark’s electricity is very expensive even with access to (expensive) hydro. Pacific Northwest and Colorado River hydro power will not come to the rescue in the US outside the Far West, since there are no large grid interconnections between the Far West and the rest of the country.

Further detail and references for the views above can be found in my new book, Environmentalism Gone Mad, available from the book Website.