Amid the clamor over saving the planet from global warming and punishing companies for the “crime” of producing fossil fuels, who is looking after the consumer? Pondering that question feels like playing “Where’s Waldo?”
Take North Carolina as an example: When the administration of Gov. Roy Cooper called for carbon neutrality by 2050, Duke Energy presented a $100 billion plan to deploy wind, solar and battery storage “on an unprecedented scale.” The plan would reduce emissions of carbon dioxide at a cost of $110 a metric ton and increase annual electricity bills by more than $400 for households and by nearly $50,000 for industrial customers, according to the John Locke Foundation.
Substantial as they would be, those costs were apparently okay with Gov. Cooper and Duke Energy even though the expenditures would not improve the climate — which is in no need of improvement in any case. As Amy O. Cooke, Locke Foundation CEO, says in an introduction to an examination of the North Carolina energy scene:
“Here’s the dirty little secret of the Big Green industrial complex: This battle isn’t about clean air or affordable power. It’s about political power to control people.”
That would be true for the likes of Gov. Cooper and bureaucrats eager to conform to the popular notion that an uncontrollable climate can be controlled and to collect other people’s money for playing the heroes. But what about Duke Energy? Instead of formulating a $100 billion “green” boondoggle, why wouldn’t the electric utility defend its current method of making 98 percent of its electricity from fossil fuels and nuclear? And why not protect the financial well-being of its customers to boot?
Because Duke thinks wind turbines and solar panels are cool? Not likely since they take up 10 times the land massand 10 times the manufacturing materials of conventional power sources to make the same amount of electricity. And solar and wind machines are available to produce power less than half the time of fossil and nuclear. No, definitely not cool.
Well, utilities are really good at making money. That’s why they have been favored investments for retirement accounts. So Duke probably thinks that it would be smart to get a guaranteed return on billions of dollars of new investments in “green” energy. In this case, Duke is thinking of the consumer but only as a captive source for earnings on goofy multi-billion dollar investments.
As for the consumer’s pocketbook, it took the John Locke Foundation to point out that if emissions of carbon dioxide must be reduced — whether useful or not — then expansion of natural gas and nuclear sources would be a fraction of the cost of wind and solar. That is still more expensive than staying with Duke’s current portfolio of power plants. But, again, when it comes to eliminating emissions of CO2 — a harmless trace gas that fertilizes plants — cost for some climate policy makers is not in the equation.
Ultimately, Gov. Cooper signed into law a bill that requires a “least cost” approach to reducing emissions. Nevertheless, the law also allows Duke Energy “to seek multiyear rate increases and performance-based earnings incentives from the state Utilities Commission,” according to the Associated Press. In other words, customers should sleep with one eye opened.
North Carolina is not unusual in this regard. Long-time analyst of electricity markets David Stevenson says, “Proposed legislation nationally and in some states would establish a requirement that 100 percent of electricity be generated from ‘renewable’ sources such as wind and solar power. This policy will lead to unacceptable electric price increases, and blackouts.”
Virginia, he notes, approved such a plan that “would essentially double electric bills by 2030.” He added that residential rates “would increase by $800 a year, according to the (Virginia) utility commission staff. The estimate rises to $1,500 a year when adding in needed transmission and distribution line to bring wind and solar power from distant locations. Large industrial energy users would see bills increase by several million dollars a year.”
In Pennsylvania, the governor has proposed a carbon tax, which the CO2 Coalition found has no scientific or economic justification. Being a Pennsylvania electricity customer, we called the Office of Consumer Advocate asking who is looking out for the interests of the consumer with regard to climate policy. We’ve gotten no response. We put the question to a former head of the office who declined to speak on the record.
Asking analyst David Stevenson the same question in an email, he answered, we suppose half in jest: “You, me and a few Republicans.” To which I can only say, “God help the consumer.”
Gordon Tomb is a senior advisor with the CO2 Coalition. This piece was published at RealClear Markets on November 22, 2021, and has been republished with permission.