Here's another way "Big Green" and "Big Utility" are planning to dip into your pocket. It's no secret that building new transmission is enormously expensive. We're talking billions for the big projects that cross states. But perhaps you haven't noticed lumpy spikes in your electric bill that correspond with new transmission projects. That's because the costs are added gradually, and spread out over as many ratepayers as possible. One of the utilities' favorite allocation analogies is to think of the cost of new transmission as "just a few pennies" on your bill. However, if you consider that there's over 60 million ratepayers in PJM alone, and if each one of them was paying "just a few pennies" for just one new transmission project, then the owner of the transmission project's payday looks like this:
The trick is to allocate costs across as many customers as possible so that no one will notice how much it actually costs.
Let's go back... way back to the early 2000's. The Federal Energy Regulatory Commission issued a rule that required new electric generators to pay their own costs to connect to the existing transmission system. Costs could include the line from the generator to the nearest transmission line, as well as any costs that result from upgrades to the existing transmission system caused by the increased injection of power from the new generator. This rule ensured that generation owners sited their new generators efficiently by combining the cost of building and operating the generator with the costs to the transmission system caused by the building of that generator. Just like it wouldn't be cost effective or logical for Walmart to build a store out in the middle of nowhere and then demand that someone else pay to build the road to connect it to the nearest town, it's not logical to build electric generators out in the middle of nowhere and then demand that regional electric consumers pay the cost of connecting it to the transmission system. A generator's location must be balanced with its costs. If the added transmission costs make its price of electricity too high to sell, then maybe another generator located closer to the load it would serve would end up being more economic for consumers. In this way, generators located closer to the consumers they serve actually become cheaper. They're also more reliable. And more economic for the community because their energy dollars stay within their community or region.
Everything worked fine under FERC's rule for years. However, taxpayer-subsidized renewable energy generators wanted to build big in order to suck up as many of your tax dollars as possible. The Midwest looked like just the place... lots of land and few neighbors combined with good natural resources. But the Midwest soon became over-saturated with renewable energy projects. Fewer people, ya know, much less demand for electricity. The renewable developers thought it was a good idea to continue to build in the Midwest, where the electricity was not needed, but to ship the electricity produced to population centers on both coasts. They soon used up all the available transmission. The Midwest grid operator, MISO, even planned and built a suite of "MVP" transmission projects designed to open new pathways for renewable generators not yet built. Guess who paid for this overly expensive gift to renewable energy developers? The electric consumers in MISO, although maybe other regions importing MISO's new renewable energy supply may have benefited more than MISO's consumers.
Recently though, renewable energy developers have hit a wall. They need not just another suite of MVP projects, but several of them. They need for regional transmission planners to plan new transmission that presumes new generators will be built in the middle of nowhere and need to be connected. And here's the thing... if the regional grid operator plans and orders the building of new transmission to serve the willy-nilly and self-serving profit-seeking of private energy corporations, then end-user electric consumers pick up all the costs. That's YOU! Instead of the renewable generator's developer picking up the costs of connecting its new, for-profit electricity factory, he wants to shift the costs to YOU.
If the costs of connecting and transmitting electricity from these new generators is separated from the cost of building and operating the generator, what happens? The cost of the generation appears to be much cheaper than it really is. Say Plant A can generate electricity in Lower Slobovia for 3 cents, but it costs 10 cents for transmission upgrades that connect it to Metro City. Plant B, proposed to be build in Metro City can generate electricity for 7 cents, but doesn't require transmission upgrades. If you simply compare the cost of the power (3 cents for Lower Slobovia vs. 7 cents for Metro City), then the Lower Slobovia generator is the more economic choice for Metro City residents. However, if you add in the transmission upgrade costs, the Metro City generator is 6 cents cheaper than the Lower Slobovia one and way more economic for Metro City-ites.
In either scenario, the ultimate users of the electricity will pay the costs of the electricity, but if you separate out the costs of the upgrades and slide them into consumer electric bills another way they may not notice, maybe they wouldn't object to paying more for electricity from Lower Slobovia because they simply wouldn't know.
That's exactly what a front group of renewable energy developers and transmission developers are demanding in a new "report" recently issued by the Astroturf-y sounding "Americans for a Clean Energy Grid." These entities stand to make a collective bundle of cash if they can continue to build new generators in Lower Slobovia, along with new transmission to connect these generators to Metro City. In order to do this, they have to convince FERC to change this rule and knowingly shift costs among consumers in a way they may not understand or notice. However, they want to do A LOT of it, with some calling for doubling or tripling the amount of electric transmission in this country. No matter how widely that's cost allocated, they won't be able to hide the gigantic spikes in your electric bill. There's a limit to how much can be hidden by expanding the captive consumers who pay for it.
It also hurts electric consumers in Metro City, who could maybe get cheaper electricity from local generation in their own community. If FERC goes all in on widely-dispersed centralized generation and long-distance transmission, as these greedy corporations suggest, they are slamming the door on community-based, centralized generation forever. A handful of corporations will get very, very rich, but Metro City will suffer economically from loss of energy jobs, increased electric bills and loss of reliability.
Never fear though... because when Mr. Metro City's bill starts going up to pay for all this remote electricity, putting solar panels on his own roof is going to start looking mighty appealing. The higher his bill goes, the more economic the cost of generating his own electricity becomes. Eventually, he'll pull the plug and stop buying remote electricity in favor of generating his own. When he does this, the costs of the remote electricity that he was paying get spread to his neighbors, which increases their costs even more. And then they look at Mr. Metro City's rooftop generator and do the figuring for one of their own. When that happens, their costs of remote electricity get shifted to their own neighbors in Metro City West. And so on, and so on... until a majority of users have separated themselves from the grid and the costs of remote electricity. At that time, the remote generators and long-distance transmission lines go broke because they're no one left to pay for them.
Just say "no" to changing FERC's Order No. 2003 to give renewable generators a free ride to Metro City. Stop the GREEN GREED! It hurts electric consumers!
Let's go back... way back to the early 2000's. The Federal Energy Regulatory Commission issued a rule that required new electric generators to pay their own costs to connect to the existing transmission system. Costs could include the line from the generator to the nearest transmission line, as well as any costs that result from upgrades to the existing transmission system caused by the increased injection of power from the new generator. This rule ensured that generation owners sited their new generators efficiently by combining the cost of building and operating the generator with the costs to the transmission system caused by the building of that generator. Just like it wouldn't be cost effective or logical for Walmart to build a store out in the middle of nowhere and then demand that someone else pay to build the road to connect it to the nearest town, it's not logical to build electric generators out in the middle of nowhere and then demand that regional electric consumers pay the cost of connecting it to the transmission system. A generator's location must be balanced with its costs. If the added transmission costs make its price of electricity too high to sell, then maybe another generator located closer to the load it would serve would end up being more economic for consumers. In this way, generators located closer to the consumers they serve actually become cheaper. They're also more reliable. And more economic for the community because their energy dollars stay within their community or region.
Everything worked fine under FERC's rule for years. However, taxpayer-subsidized renewable energy generators wanted to build big in order to suck up as many of your tax dollars as possible. The Midwest looked like just the place... lots of land and few neighbors combined with good natural resources. But the Midwest soon became over-saturated with renewable energy projects. Fewer people, ya know, much less demand for electricity. The renewable developers thought it was a good idea to continue to build in the Midwest, where the electricity was not needed, but to ship the electricity produced to population centers on both coasts. They soon used up all the available transmission. The Midwest grid operator, MISO, even planned and built a suite of "MVP" transmission projects designed to open new pathways for renewable generators not yet built. Guess who paid for this overly expensive gift to renewable energy developers? The electric consumers in MISO, although maybe other regions importing MISO's new renewable energy supply may have benefited more than MISO's consumers.
Recently though, renewable energy developers have hit a wall. They need not just another suite of MVP projects, but several of them. They need for regional transmission planners to plan new transmission that presumes new generators will be built in the middle of nowhere and need to be connected. And here's the thing... if the regional grid operator plans and orders the building of new transmission to serve the willy-nilly and self-serving profit-seeking of private energy corporations, then end-user electric consumers pick up all the costs. That's YOU! Instead of the renewable generator's developer picking up the costs of connecting its new, for-profit electricity factory, he wants to shift the costs to YOU.
If the costs of connecting and transmitting electricity from these new generators is separated from the cost of building and operating the generator, what happens? The cost of the generation appears to be much cheaper than it really is. Say Plant A can generate electricity in Lower Slobovia for 3 cents, but it costs 10 cents for transmission upgrades that connect it to Metro City. Plant B, proposed to be build in Metro City can generate electricity for 7 cents, but doesn't require transmission upgrades. If you simply compare the cost of the power (3 cents for Lower Slobovia vs. 7 cents for Metro City), then the Lower Slobovia generator is the more economic choice for Metro City residents. However, if you add in the transmission upgrade costs, the Metro City generator is 6 cents cheaper than the Lower Slobovia one and way more economic for Metro City-ites.
In either scenario, the ultimate users of the electricity will pay the costs of the electricity, but if you separate out the costs of the upgrades and slide them into consumer electric bills another way they may not notice, maybe they wouldn't object to paying more for electricity from Lower Slobovia because they simply wouldn't know.
That's exactly what a front group of renewable energy developers and transmission developers are demanding in a new "report" recently issued by the Astroturf-y sounding "Americans for a Clean Energy Grid." These entities stand to make a collective bundle of cash if they can continue to build new generators in Lower Slobovia, along with new transmission to connect these generators to Metro City. In order to do this, they have to convince FERC to change this rule and knowingly shift costs among consumers in a way they may not understand or notice. However, they want to do A LOT of it, with some calling for doubling or tripling the amount of electric transmission in this country. No matter how widely that's cost allocated, they won't be able to hide the gigantic spikes in your electric bill. There's a limit to how much can be hidden by expanding the captive consumers who pay for it.
It also hurts electric consumers in Metro City, who could maybe get cheaper electricity from local generation in their own community. If FERC goes all in on widely-dispersed centralized generation and long-distance transmission, as these greedy corporations suggest, they are slamming the door on community-based, centralized generation forever. A handful of corporations will get very, very rich, but Metro City will suffer economically from loss of energy jobs, increased electric bills and loss of reliability.
Never fear though... because when Mr. Metro City's bill starts going up to pay for all this remote electricity, putting solar panels on his own roof is going to start looking mighty appealing. The higher his bill goes, the more economic the cost of generating his own electricity becomes. Eventually, he'll pull the plug and stop buying remote electricity in favor of generating his own. When he does this, the costs of the remote electricity that he was paying get spread to his neighbors, which increases their costs even more. And then they look at Mr. Metro City's rooftop generator and do the figuring for one of their own. When that happens, their costs of remote electricity get shifted to their own neighbors in Metro City West. And so on, and so on... until a majority of users have separated themselves from the grid and the costs of remote electricity. At that time, the remote generators and long-distance transmission lines go broke because they're no one left to pay for them.
Just say "no" to changing FERC's Order No. 2003 to give renewable generators a free ride to Metro City. Stop the GREEN GREED! It hurts electric consumers!
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