If Egyptology suddenly came into fashion in Oregon, and enthusiasts convinced the state to use its ratemaking powers to advance the cause, utilities would gladly build a pyramid in Portland, and they would make money doing so.
That's how cost of service utility rates work. the more money utilities invest in their systems, the more money they make. That's because every dollar they spend is returned to them by ratepayers, plus interest, over the usable life of the asset (often 40 years or more). It works just like your home mortgage -- the bank invests in your house, and you pay them a small amount of principal every month, along with interest on the remaining balance, until the debt is exhausted. But while your interest rate may be somewhere between 3 - 5%, utilities earn interest on their investments at a rate between 9 - 12%, or more. Utilities and their regulators insist that these kind of interest rates are necessary to attract investment in utility infrastructure.
So, what's this about a green pyramid? A recent op-ed in the Wall Street Journal by NARUC president Travis Kavulla tells How Utilities are Teaming Up with Greens Against Consumers.* Mr. Kavulla ought to know -- the National Association of Regulatory Utility Commissioners is a trade group for state utility commissioners.
Mr. Kavulla points out how big green is driving state policy to hasten the switch to renewables, and many utilities are going along for the ride because it's profitable for them. What you may think is great environmental policy may be costing you a lot more. The environmental groups behind this legislation that urge you to support it usually fail to tell you the whole story. When they claim to have wrestled a utility giant to the floor to get environmental concessions, the truth is that the utility only went along because there was more profit in it for them then they could make from resisting. And who pays the bill? You do!
In addition to Mr. Kavulla's excellent example, consider the Sierra Club's proposed "settlement" agreement with utility giant AEP in Ohio. Sierra Club told the public that they scored big by "forcing" AEP to agree to repower with natural gas (or close) some of its coal plants 15 years from now, and to "commit" to develop 500 megawatts of wind energy and 400 megawatts of solar energy. In exchange, Sierra Club agreed to allow AEP to rip off Ohio consumers by making them pay to financially prop up power plants that are uneconomic for the company. Ratepayers will foot the bill to repower or close the coal plants, plus the cost of developing the renewables, plus the cost of the rate increase AEP wanted in the first place. Sierra Club wins! AEP wins! Electric ratepayers lose!
While saving the environment may have been an admirable goal at one time, it's gone way, way beyond that in recent years. Big green is outta control! They're no longer funded by their members and therefore responsive to their needs. Now they're funded by enough foundations, dummy organizations, and front groups to give the Koch brothers wet dreams. It's all secretly funded by what I like to call "the environmental 1%," a bunch of filthy rich guys who want to control energy policy for their own gain. How do they gain? They invest in renewable energy. No different than the hated Koch critters. Their big green organizations are now bought and paid for through grants and contributions. They're not a consumer's friend any more. It's no longer about protecting the environment... the game plan has changed. Big green doesn't care how much it costs you... and the utilities are raking in their own kind of green.
But don't worry, little ratepayer, when you can no longer afford to pay your electric bill, you can always warm your tootsies at your town's green pyramid.
*If you're not a WSJ subscriber, copy and paste the headline into google and click through to read the article for free.
So, what's this about a green pyramid? A recent op-ed in the Wall Street Journal by NARUC president Travis Kavulla tells How Utilities are Teaming Up with Greens Against Consumers.* Mr. Kavulla ought to know -- the National Association of Regulatory Utility Commissioners is a trade group for state utility commissioners.
Mr. Kavulla points out how big green is driving state policy to hasten the switch to renewables, and many utilities are going along for the ride because it's profitable for them. What you may think is great environmental policy may be costing you a lot more. The environmental groups behind this legislation that urge you to support it usually fail to tell you the whole story. When they claim to have wrestled a utility giant to the floor to get environmental concessions, the truth is that the utility only went along because there was more profit in it for them then they could make from resisting. And who pays the bill? You do!
In addition to Mr. Kavulla's excellent example, consider the Sierra Club's proposed "settlement" agreement with utility giant AEP in Ohio. Sierra Club told the public that they scored big by "forcing" AEP to agree to repower with natural gas (or close) some of its coal plants 15 years from now, and to "commit" to develop 500 megawatts of wind energy and 400 megawatts of solar energy. In exchange, Sierra Club agreed to allow AEP to rip off Ohio consumers by making them pay to financially prop up power plants that are uneconomic for the company. Ratepayers will foot the bill to repower or close the coal plants, plus the cost of developing the renewables, plus the cost of the rate increase AEP wanted in the first place. Sierra Club wins! AEP wins! Electric ratepayers lose!
While saving the environment may have been an admirable goal at one time, it's gone way, way beyond that in recent years. Big green is outta control! They're no longer funded by their members and therefore responsive to their needs. Now they're funded by enough foundations, dummy organizations, and front groups to give the Koch brothers wet dreams. It's all secretly funded by what I like to call "the environmental 1%," a bunch of filthy rich guys who want to control energy policy for their own gain. How do they gain? They invest in renewable energy. No different than the hated Koch critters. Their big green organizations are now bought and paid for through grants and contributions. They're not a consumer's friend any more. It's no longer about protecting the environment... the game plan has changed. Big green doesn't care how much it costs you... and the utilities are raking in their own kind of green.
But don't worry, little ratepayer, when you can no longer afford to pay your electric bill, you can always warm your tootsies at your town's green pyramid.
*If you're not a WSJ subscriber, copy and paste the headline into google and click through to read the article for free.
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