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Energy User Responsibility - ORIGINAL CONTENT

Edward A. Reid Jr.
Posted On:
Feb 27, 2024 at 6:00 AM
Energy Policy, Climate Change

Previous commentaries (Government Responsibility, Renewables Responsibility and Grid Responsibility) dealt with the government, renewables industry and grid operator perceptions of their responsibilities regarding the proposed energy transformation.

Government, at all levels, apparently believes that its responsibility in the proposed energy transition is to establish the goals, set the timeline, pick the winning technologies and incentivize their market adoption. This perception led to Net Zero by 2050, all-electric everything, wind and solar generation, electric vehicles and a variety of incentives, subsidies and mandates.

The renewable energy industry apparently believes that its responsibility in the proposed energy transition is take maximum advantage of federal and state subsidies, incentives, preferences and mandates by installing as much generating capacity as the industry participants can finance and get connected to the grid. The industry also believes that the grid should accept all of its output whenever it is available. The opportunity the industry perceives is the result of Net Zero by 2050, all-electric everything, and the selection of wind and solar as the winning technologies.

The overall responsibility of the utilities, which own and operate the grid and much of the generating capacity which feeds the grid, and the ISOs and RTOs through which they coordinate their generation and transmission operations, is to assure reliable and economical electricity service Their operational and financial performance are overseen by state utility commissions and consumers’ counsels.

Energy users do not escape responsibility during the proposed energy transition. They are already responsible for paying higher electricity rates as a result of the redundant electricity generation investments required by the transition, which would likely continue to grow as the fraction of renewable generation on the grid increases.

Energy users would also be required to replace fossil fueled end use equipment with electric end use equipment as the transition to all-electric everything proceeds. Customers would be responsible not only for the cost of the replacement equipment, but also for the costs of building modifications necessary to accommodate the electric end use equipment. Many customer buildings would likely also require electric service upgrades to support the increased electricity demand. Many sections of the electric distribution grid would also likely require capacity upgrades, which would be reflected in customer bills.

Energy users might also be required to increase the thermal and electrical efficiency of their buildings to reduce energy demand and consumption. Building Green analyzed “The Challenge of Existing Homes: Retrofitting for Dramatic Energy Savings” several years ago. The intent of the energy transition is to accomplish what Building Green refers to as a major energy retrofit, which they estimated would incur an average cost of approximately $50,000 per dwelling unit. No such estimates are available for commercial, institutional and industrial buildings, though the average cost would be substantially greater than for residential dwelling units.

Many industrial fossil fuel energy end uses do not currently have alternative electric replacements. Customers and their equipment suppliers would be responsible for developing and installing electric alternatives. Their transition would require large distribution upgrades and, in some cases, transmission upgrades to serve the increased demand.

Vehicle owners would be required to replace internal combustion engine (ICE) vehicles with electric vehicles, which are currently significantly more expensive than ICE vehicles while offering diminished utility. Battery charging facilities for these electric vehicles would likely require additional customer electric service upgrades as well as distribution grid upgrades which would be reflected in customer electricity bills.

Government is also interested in “herding” individuals, families, businesses and service providers into “15-Minute Cities” to limit the need for personal travel. This would constitute a significant loss of personal freedom for many of those affected.

Much of the cost of the end user changes would likely be offset with government subsidies, which would appear to reduce end user direct costs, but would only transfer that portion of the costs to taxpayers, thus not reducing the societal costs of the changes, but likely increasing them, since the subsidies would be funded with new government interest-bearing debt.  

TANSTAAFL: There ain’t no such thing as a free lunch.