from masterresource
By Alan Brooks — December 10, 2024
“New England’s electricity bills are expected to increase dramatically, driven by clean energy mandates in five of the six states that require duplicative, overbuilt renewable energy.”
This summer, Connecticut taxpayers were hit with sky-high prices when their July electric bills were released. While their energy consumption remained relatively flat, the “public benefit” component doubled for some and tripled for others. Given legislation requiring utility companies to itemize the cost components of their monthly bills, the culprit isn't hard to find.
“Public benefits” cover the cost of state subsidies for low-income electricity customers and energy efficiency programs. They also include solar, electric vehicle and other renewable energy incentives.
Subsidies for renewable energy and assistance to low-income residents who cannot afford high-priced electricity are increasing in various places, which has brought an increasing cost burden to electricity users in the Northeast.
Connecticut: Worst case scenario
The Northeast has become the most expensive region in the continental United States for electricity bills. Electricity bills in Connecticut are the most expensive of the 50 states outside of Hawaii. According to the U.S. Energy Information Administration, Connecticut's overall electricity price in September was 27.08 cents per kilowatt hour (ȕ/kWh), while Hawaii's was 35.46 /kWh.
Typically, the most expensive state for electricity is California, but its price is $0.50 per kilowatt hour lower than Connecticut. When we look at residential electricity prices, California is nearly 1.5 cents cheaper than Connecticut at 33.01 Angstroms/kWh.
Home prices in Connecticut are the highest among the six New England states. Even Vermont, the cheapest state for residential electricity, is over 22 Angstroms/kWh. Compared to U.S. prices, New England homes and all industries are approximately 75% more expensive, with every state far exceeding the national average.
State Sen. Ryan Fazio, D-Greenwich, Conn., has been investigating the power market during his three years in office. Freshly re-elected, he prefers to change the law so that public benefits are paid for by state taxes rather than utility bills. His reasoning is that while many of these projects are valuable, they should be subject to public hearings and reviews every two years for cost and benefit analysis, rather than “through hidden taxes in power bills.” Automatically receive funding.
Connecticut’s electricity customers are beginning to understand the risks they face from rising subsidy costs for renewable energy programs that are key to the state’s decarbonization goals. Their concerns led Connecticut Gov. Ned Lamont (D) to refuse to participate in offshore wind power procurement last summer, despite being one of three states – Connecticut, Massachusetts and Rhode Island – touting partners in state offshore wind agreements. His reluctance to do so stems from the high cost of electricity and growing dissatisfaction among residents over rapidly rising electricity bills.
Part of the public benefit bill is used to fund the continued operation of the state's Millstone nuclear power plant, which lawmakers thought was a good idea in 2019. No success. They rejected him.
In a speech to the Stanford Board of Trustees' Committee on State and Business, Fazio discussed public welfare costs and “policy mistakes“ Progress has been made in Connecticut's power market, keeping power prices high in the state. He showed a chart detailing electricity bills. Producing electricity accounts for 30% of the bill, transmission from power plants to substations 11%, distribution to households 31%, and public benefits 28%.
As a Republican in a Democratic-controlled state, Fazio's efforts to reform regulation of public benefit fees may not go forward. Although he has 64 co-sponsors, the bill is still 25 short of co-sponsors for the hearing. However, his efforts to educate the public and other lawmakers will keep the question of who pays what (and how much) in the renewable energy transition front and center in state policy. “Green” politics is becoming an increasingly difficult sell.
rhode island
Residential electricity prices are rising rapidly in Rhode Island. The culprit? Renewable energy costs increase eight times Between 2017 and 2023.
In light of Fazio's comments about public welfare, consider the electric bill for my summer home in Rhode Island. Using the same categories as Fazio, Rhode Island's breakdown is markedly different. Generation accounts for 49% of our bill, distribution accounts for 24%, transmission accounts for 12% and public benefits account for 15%. Some of these differences are to be expected given the differences in geographic size between Connecticut and Rhode Island. Additionally, Connecticut has three times the population of Rhode Island.
These differences help explain Connecticut's higher distribution share. Surprisingly, the transmission shares are similar. The most surprising difference is the cost of electricity, partly because Connecticut has a nuclear power supply while Rhode Island does not. Rhode Island does not appear to spend as much on public benefits as Connecticut. This may be because the population is smaller and therefore fewer people benefit from or need public support programs.
Massachusetts
Consider a recent study that estimated “green” New England Energy Project, “The Surprising Cost of Green Energy Policy in New England,” by Isaac Orr, Mitch Rolling, and Trevor Lewis (September 2024) found:
The annual cost of Massachusetts' renewable energy policy has quadrupled in 10 years, from $250 million in 2011 to $1 billion in 2020. Dollar.
The fee cost Massachusetts' 7 million residents $143 in 2020 and about $850 in 2011-2020. The taxpayer bill for 2020 is approximately $12 per month. We don't know if or how much that fee will increase by 2024, but we assume it has. In Rhode Island, that's the equivalent of $18 per month on our electric bill.
There will be more interest rate hikes in the future
Electricity bills in New England are expected to increase dramatically, driven by clean energy mandates in five of six states that require duplicative, overbuilt renewable energy. A new report outlines the costs of decarbonizing the Independent System Operator-New England (ISO-NE) electricity system by 2050, which supplies electricity to six New England states. The share in volume increases from 6% in 2023 to 71% in 2050.
Electricity generation in New England is expected to increase by 106% by 2050 due to the shift to electric vehicles and heat pumps, requiring grid expansion to meet this growth. A significant increase in electricity use will also shift the region's seasonal peak from summer to winter. Additionally, winter experiences two daily peaks—the time people start their day and the time they return home in the late afternoon and early evening.
in conclusion
The study by Orr, Rolling and Lewis documents the staggering costs of plans to decarbonize New England residents. A two-year study conducted by ISO-NE estimated renewable energy demand at 97 GW, with blackouts expected to lead to overcapacity. Are citizens aware of the cost tsunami that is occurring as a result of national decarbonisation plans?
As citizens become more aware of the current and future costs of the electricity system, expect resistance to the nation's decarbonization efforts to grow. It turns out that staggeringly high electricity bills provide a huge incentive for people to learn more. An educated public is great, but not so much for the politicians and regulators driving the decarbonization agenda.
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