Los Angeles Times: Renewable Mandates Driving Up Electricity Prices

Published April 28, 2014

Renewable power mandates are driving up electricity prices in a manner that may be irreversible, the Los Angeles Times reported Saturday. Restrictions on coal-fired power plants are adding to the electricity sticker shock and threatening the reliability of electricity demand, the Times reported.

“There is a growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired power plants, reductions in nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The result is likely to be future price shocks. And they may not be temporary,” the Times observed.

“In California, residential electricity prices shot up 30% between 2006 and 2012, adjusted for inflation, according to Energy Department figures. Experts in the state’s energy markets project the price could jump an additional 47% over the next 15 years,” the Times reported.

Feds Wrong on Coal Power
The Times noted the federal government claimed recently imposed environmental restrictions on coal-fired power plants would result in few coal-fired power plants shutting down. Instead, the Times reported, “The forecast on coal plants turned out wrong almost immediately, as utilities decided it wasn’t economical to upgrade their plants and scheduled them for decommissioning.”

“At the same time,” the Times observed, “30 states have mandates for renewable energy that will require the use of more expensive wind and solar energy. Since those sources depend on the weather, they require backup generation – a hidden factor that can add significantly to the overall cost to customers.”

California a Poster Child
In California, local government utility officials confirm federal and state anti-coal, pro-renewable power policies are taking a toll on electricity supply and prices.

“Our rates are increasing because of all of these changes that are occurring and will continue to occur as far out as we can see,” said Phil Lieber, chief financial officer of the Los Angeles Department of Water and Power, in the Times. “Renewable power has merit, but unfortunately it is more costly and is one of the drivers of our rates.”

“While renewables are coming down in cost, they are still more expensive,” Russell Garwacki, manager of pricing design and research at Southern California Edison, told the Times.

The Times noted Southern California Edison is imposing an additional 10% rate hike this year to keep up with the rising costs.

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.