After what seemed to be a colder winter than usual this last year, and bills that topped over $500 dollars in one month becoming a real thing here in Virginia, for the first time in a long time, folks actually broke down their electricity bill. If you were one of these many people, you may have noticed some new line items outside of the norm.These included riders for some energy producing plants that are being decommissioned as well as clean energy projects that are being developed to meet Virginia’s aggressive VCEA that was passed by the General Assembly which mandated a goal of 100% zero-carbon energy generation by 2050. Regardless of where you fall on the political spectrum, and what position you might take on the reasonableness of such an aggressive goal, these $500+ bills are only the beginning, and are only going to happen more frequently.
One of the hardest realities for most people to understand is that they are already paying for someone else’s solar and it is going to cost them far more for public solar projects compared to their own over time. Whether the line item on the bill is for the opening or closing of facilities, an assessment for environmental cleanup, or a tax for the use of non-renewable fuels, almost all of them are directly proportional to the amount of power you purchased from the utility. Meaning, if you depend on the utility less, in many cases your contribution will lower as well. Unfortunately, for the layperson it can be difficult to isolate and understand these charges. Heck, most people won’t even notice them because they have to pay the bill anyway… but here in this post we are going to examine the most common additional assessments that you have on your bill that don’t include generating or delivering your power.
Generation Plant Closures – Virginia isn’t the only state with a mandated 100% zero-carbon goal. Many states throughout the country have goals with varying levels of aggression…some are more aggressive, with time frames of as little as 12 years, while others are less aggressive, but still have significant mandated zero-carbon standards. What this means is that over the next few decades, more and more coal, natural gas, and even nuclear plants will have to be shut down. When these plants are closed, there are real costs to decommissioning, cleaning, and re-appropriating their infrastructures, and all the expenses will be showing up on our bills.
Electric Generation Facility Construction – In the world of energy, anything that generates power–whether it be coal, natural gas, nuclear, hydro, solar, wind, or batteries–would be considered a generation facility. Considering the discussion at hand surrounding the transition, the focus would lean toward the costs of construction for the later three. These types of facilities specifically demand a great amount of initial investment, as well as long term maintenance. As traditional generation plants close, new ones need to be put in their place, which by itself will cause some disruption, not to mention the need to exceed prior generation in some areas due to the emergence of the Electric Vehicle. Upgrades and replacements will have to be quick, will come a substantial investment, and are already being felt on the budget of many homes.
Environmental Compliance Cost – After designing systems throughout the entire United States, we’ve really gotten exposed to the sliding scale of environmental diligence from state to state and utility to utility. Unfortunately, in some states like Georgia, it meant discovering that some of the efforts to protect local water, soil, and livestock have fallen short and immediate efforts need to be made to avoid catastrophic events. The failure of their coal ash holding ponds have run a bill of over nine billion dollars, with only the first 525 million dollars in costs being released to the customers of Georgia Power. With an estimation of 20 times that coming in the future, it’s only a matter of time before the assessment delivered to their customers becomes an even more substantial part of their bill. Make no mistake though, states all across the country, like California, Michigan, and Tennessee, to name a few, have had similar problems, and there is little doubt that more will in the future .
Honorable Mention:
Power Cost Adjustment/Fuel Cost Recovery – Another charge that has presented itself in the last few years is the PCA or the Power Cost Adjustment. With a regulated utility like electricity, many of the power costs are settled on years beforehand and need specific approval to be adjusted. Unfortunately, there are times where the cost of fuel, environmental regulations, or even natural disasters can severely impact the actual costs of energy generation and transmission, and the PCA is a tool that was developed to band-aid a sudden increase without the need for the strenuous approval process. Unfortunately, what we have seen over the last few years is utilities framing these costs as “temporary” when in reality they might fluctuate but rarely disappear altogether. The reason we mention them here is that they are technically costs associated with generation, but do not normally get communicated when asking a provider about their rates.
With all this being said, the “Energy Renaissance” is happening, and the options are limited. Some folks who might not be able to get solar or believe that they have shorter years ahead might decide to ride the storm out as long as they need to. However, for people who have the opportunity and means to get their own power generation plant at home, it’s time to really explore all of your options… I mean, you’re paying for solar either way, aren’t you?
Fred West
Owner/CEO The Solar Agents