Monday, November 08, 2010

Socializing Energy: Good Idea?


How would you like to pay higher utility bills to finance expensive electricity from solar and wind power, which you would never use? That's the issue now before the Federal Energy Regulatory Commission (FERC), and it deserves more public and political scrutiny before it becomes a reality. 
Transmission lines connect coal, natural gas and nuclear plants to the electric grid so that power can be delivered to homes and businesses. The costs of building this infrastructure, hooking up to the national electric grid and transporting electricity to the end users has traditionally been paid by the industries and passed on to rate payers. This long-standing user-pays policy would be replaced with a policy of everyone pays under FERC's plan. 
The big winners from socializing transmission costs would be wind and solar projects that tend to be in remote areas, like the desert or offshore. In many cases, thousands of miles of new transmission lines would have to be built to get the power to the end user. Google recently announced it will be a major investor in a $5 billion wind farm off the coasts of New Jersey, Delaware and Virginia that will require hundreds of miles of underwater transmission lines. No one is saying who will pay for those transmission costs, but it's a safe guess the investors are betting that FERC will decide to socialize them.

Why should those who do not benefit pay for these projects?  I'm not saying that wind and solar are bad, but that the economics should match the warm fuzzy feelings.  If the projects are not economically solvent on their own merits;
  • they become just like the ethanol scams.  
  • it should not be done..., unless totally funded by the investors and/or the users of the energy produced.  Unless a product can pay for itself, it becomes a jam down like ethanol.
Call me crazy or narrow minded, but I, living in metro Denver, do not want to pay for hundreds of miles of underwater transmission lines to connect to wind farms off the coasts of New Jersey, Delaware and Virginia.  Allow Google to factor the cost of the transmission lines into their feel good, nothing to lose, profit to gain investment in the wind farms.

I'd write to Ed, Mike or Mark, if I thought there was a snowball chance in hell they'd see my point, but those of you in Kentucky, Texas, and other states with sane representation could.  On 2nd thought, I lived in Ky and Texas.  I'll write to those Representatives and Senators.

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