It's the Environment, Stupid.

Saturday, February 17, 2007

Electricity Prices Soar But No One Mentions Conservation

A big ol' article in the NY Times business section highlights the rising price of electricity. The reporter talks to a mayor of a small Illinois town who is quoted as saying, "People should not be in the position of choosing between keeping warm or buying medicine and food, and I fear that too many are going to be in that situation."

The article goes on to talk about regulating the electricity markets - or deregulating them - and then toys with the question of who is going to pay for building more power plants (coal fired I'm assuming). The consumer via higher electric bills? California has shown (by way of Enron) that having electricity price caps and calling it deregulation is a recipe for a very brown-out disaster. (Have a read through Vijay Vaitheeswaran's Power to the People for additional insight.)

What the NY Times article fails to mention is that people will have to choose whether to stay warm or go hungry. But the reason isn't due to higher electricity rates. It is because 1) our buildings/homes are inefficient, and 2) there is no incentive to conserve energy use during peak load time when energy prices are higher than at base load times.

Instead of energy regulation/deregulation politicos should be talking about how to make our living and working quarters waste less energy. Let's work with architects, developers, contractors, landlords to start requiring better insulation, windows, and broilers. (Andrew Padian of Steven Winter Associates gives a very convincing presentation on this matter.)

The positive side of higher electric bills however is similar to the spike in gasoline prices - people will inevitably think about their electric bills, and alternative sources will make headlines. The downside, people will blame the government and utility companies instead of reducing their own power consumption.

3 Comments:

  • Texas deregulated energy and there was a study last year showing that prices of electricity increased big-time (after factoring out inflation).

    By Anonymous Preston, at 12:20  

  • My electric bill used to be 189 dollars at the coldest or hottest part of the year. Now its 310.

    By Blogger dragonfly183, at 12:43  

  • Yes, it is sad that we will not think about reducing power consumption, price rise or none, even though it is necessary for our shared future.

    The only thing that concerns them is how much it will affect their pockets and not the affect on the environment.

    By Anonymous signature103, at 05:39  

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