Falling or Increasing Renewable Energy Rates

For years we have been told wind and solar produces cheaper electricity than fossil fuels. If correct, then electric rates should decrease as wind and solar replace fossil fuel plants. An unchallenged assumption is it will be easy and costless to replace fossil fuel infrastructure with wind, solar and storage infrastructure. However, reality intrudes and instead of decreasing electric rates as renewables increase, New Jersey residents are incurring a billion dollars per year in subsidies just to produce and consume renewable electricity.

All together, those subsidies add up to more than a billion dollars. The solar sector costs ratepayers more than $500 million a year; the nuclear subsidies $300 million annually; and $30 million per year goes to provide rebates for people to buy electric vehicles (1)

These current subsidies do not include the unknown subsidies required to provide `cheap’ offshore wind electricity. However, the subsidies to produce a robust solar industry costs ratepayers $83,000 per job per year.

Did the BPU know renewable energy was increasing rates instead of decreasing rates.  It appears so

`The cost of doing all of that has been cushioned by historically low natural-gas prices, a factor that stabilized utility rates and kept bills low. (1)’

This means low-cost natural gas has masked the high costs of renewables and their subsidies. The BPU has overlooked that energy rates have doubled and tripled in Germany, Australia, United Kingdom and California. Places where wind and solar have significant grid penetration.

The attached article (2) by Frances Menton discusses the same falling cost argument and calculations, while electric rates increase, from the United Kingdom, as used in New Jersey. The BPU should identify how the energy transition in New Jersey will differ from the United Kingdom plan and actually reduce costs.

 

(1) https://www.njspotlightnews.org/2022/09/heating-costs-higher-heating-costs-subsidies-solar-offshore-wind-electric-vehicles-nuclear-bpu-aarp-covid-19-electrification-utilities-ukraine/

(2) https://www.manhattancontrarian.com/blog/2022-9-16-cost-of-the-green-energy-transition-who-you-gonna-believe-me-or-your-lyin-eyes

 

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Seth Grossman, Executive Director

LibertyAndProsperity.com

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