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Hidden ‘green’ energy costs loom large

Ever wonder what some of the real costs are for embracing renewable energy policies? It is fashionable to think “green” and many approaches to reduce our carbon footprint do make considerable sense. But there are some tradeoffs, to be sure.

Dr. Ken Blanchard is professor of political science at Northern State University in Aberdeen, South Dakota. Blanchard took it upon himself to study some of those hidden costs in “going green.” He reported his findings in an article published in South Dakota Magazine a few months ago.

What U.S. citizens pay for power varies greatly depending on where you live. In South Dakota, residential users pay about 9 cents per kilowatt-hour, according to Blanchard. In Alaska, it’s about double that amount. In Hawaii, three times that amount. To put things into perspective, Pacific Gas & Electric Co. users in Northern California pay about 13 cents per kilowatt hour for their baseline rate. That rate climbs if the baseline is exceeded, which many residential users find necessary.

In Southern California, that rate is about 18 cents per kilowatt hour. Here in Idaho, which enjoys some of the cheapest utility rates in the nation, the cost is about 8 cents per kilowatt hour. Relatively low utility rates were one of the many attractions that lured me to Idaho from California when I retired two years ago.

For his study, Blanchard converted kilowatt hour prices to megawatt hours. On average, Americans pay about $120 per megawatt hour for electricity. But that tells only part of the story, because there are state and federal subsidies that become hidden costs in purchasing power.

The Institute for Energy Research calculated those subsidies back in 2007, according to Blanchard, which showed the following subsidy amounts per megawatt hour: natural gas and petroleum, 25 cents; coal, 44 cents; hydroelectric, 67 cents; nuclear power, $1.67. In 2007, wind and solar received subsidies of $23 and $24 respectively per megawatt hour.

Things changed dramatically during the Obama presidency and his stimulus bill that followed. Those subsidies for power production reported in 2010 are as follows: natural gas and petroleum, 64 cents; coal, 64 cents; hydroelectric 84 cents; nuclear power, $3.14; wind, $56.29 and solar, $775.64 per megawatt hour.

Blanchard’s study reveals that wind energy that back in 2007 cost about $144 per megawatt hour now costs $170 for the same amount of energy. For solar, the numbers are staggering. What cost $144 for solar now costs almost $900 per megawatt hour.

During a tough time for consumers, it’s hard to fathom that our government is still pushing so much renewable energy and requiring public and private utility companies to increase their mix of solar and wind power to their grids when costs are skyrocketing.

Here in Idaho, the state’s huge power utility is trying to fight back. It’s uncertain whether it will be successful.

Idaho Power wants to shut down wind power plants across Idaho during periods of low demand. A federal ruling says the power company can’t do that, but Idaho Power is expected to appeal the federal decision to the Idaho Public Utilities Commission.

The Federal Energy Regulatory Commission ruled last month that the company’s plan to limit wind power was inconsistent with the Public Utility Regulatory Policies Act passed in 1978.

Idaho Power firmly believes that the inconsistencies of wind power forces it to turn its low-cost coal-burning operation off and on and ultimately costs its customers much more for energy. What complicates matters is that wind across Southern Idaho that propels the turbines is at a peak when Idaho Power users do not need it.

In an Oct. 7 article in the Idaho Statesman, Idaho Power spokeswoman Lynette Berriochoa gave an illustration. When peak power demand set a record at 4 p.m. July 12 at 3,245 megawatts, wind turbines generated just 14 megawatts – even though there’s 440 megawatts of wind capacity connected to the system, she said.

“That raises rates and it is not a win for customers,” Berriochoa said.

Ultimately, the Idaho PUC will decide, but Idaho Power could appeal to the state’s Supreme Court.

No doubt, utilities in California are experiencing some of the same issues. The state is the third-leading producer of wind energy in the nation behind Texas and Iowa. There are about 800 power-generating wind turbines in Solano County and the region is expected to see more in the future.

It is worth noting what hidden costs are lurking out there and what some utilities are trying to do to keep customers’ interests in balance with politics and political correctness.

Bill James is a former editor and publisher of the Daily Republic, now living in Meridian, a suburb of Boise.