Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable - Highlighted Article

From: Energy Bad Boys - Substack

By: Mitch Rolling and Isaac Orr

Date: January 6, 2024

Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable

Rate cases throughout America tell the same story about the high cost of going green

Electricity prices in the United States are skyrocketing, with all-sectors electricity rates reaching new all-time highs in 2022 and 2023, but wind and solar advocates like to pretend that these energy sources are not responsible for the rising electricity costs paid by American families and businesses.

However, recent reports from Regulatory Research Associates (RRA), a division of S&P Global Commodity Insights, evaluating requests from electric companies to raise their prices (known as rate cases) clearly show that rising electricity prices are largely being driven by spending billions of dollars on wind turbines, solar panels, natural gas plants, and new transmission lines in pursuit of the so-called “energy transition.”

Our deeper-dive into the eight largest rate increase requests, as identified by RRA, reaffirms these findings by quoting directly from rate cases filed with state regulators, debunking the idea that wind and solar aren’t causing electricity rates to rise, once and for all.

Rate Making 101

Before we discuss the individual rate cases, it is important to understand that there is no free market for electricity, and there may never be.

In much of the country, electric companies are government-approved monopoly utilities that have the exclusive right to sell electricity in their service territories. Because electric companies are monopolies, it would be unfair to let them charge whatever they wish for electricity, so electricity prices are set by government regulatory bodies that oversee utilities, often called Public Utilities Commissions (PUCs) or Public Service Commissions (PSCs).  

When electric and gas utility companies want to raise prices on customers to pay for additional expenses, they must file rate cases with the PUC or PSC that justify the additional expenses in the company’s request.  

These additional expenses frequently consist of building new power plants, such as wind turbines, solar panels, or natural gas plants, as well as the additional ten percent profit utilities make on virtually every new asset they build and the cost of interest used to finance the construction of the plants. If the additional expenses outlined in the rate case are approved by the PUC or PSC, electricity rates go up for customers.

Rate increase requests have skyrocketed in recent years, according to the RRA reports, and so has the amount of money that electric companies are looking to raise from them. (continue reading)

Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable