Customers Pony Up for Renewable Energy

[jpak]

http://www.lasvegassun.com/sunbin/stories/tech/2006/jul/29/072908939.html

The Rev. Francis Galles lives on a retired priest's income, but he doesn't mind paying an extra 60 bucks a year to make sure some of the energy he uses comes from the wind turbines churning across southern Minnesota. "It's not much. I'd pay more," he said.

Galles is part of a small but growing group of consumers who, despite an era of high energy costs, are willing to pay a premium to support renewable energy.

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About 23,000 Minnesota households last year paid as much as an additional $150 for electricity, up 30 percent from last year, according to the state Commerce Department.

<snip>

The trend is upward elsewhere, too. Utilities in 36 states offer some form of green pricing, and last year 430,000 households bought green power - up 20 percent from a year earlier, the U.S. Energy Department reported.

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[AnnieBW]

1. I'd Pay It

I don't know if this is offered in Maryland, but I'd pay it!

Heck, Las Vegas should be on the leading edge of the renewable energy curve. All of the electricity used there could be powered by giant solar farms.

[mom cat]

2. In Boston, contact Mass Energy

http://www.massenergy.com/Options.html

[skids]

3. links to find if you have a program...

http://www.eere.energy.gov/greenpower/buying/buying_power.shtml

http://www.eere.energy.gov/greenpower/markets/marketing.shtml?page=1

[Dead_Parrot]

4. I still don't get this...

AFAIK, All renewables used by power co.s pay for themselves within their lifetime: Wind in ~3 years; PV - well, let's say 10 years, but I'm sure Jpak will tell me it's only 9.96 ;); hydro around 25, and solar thermal... I'm guessing about 6 years but I'm open to suggestions.

For most companies, I think the "green" bit is done by wind, but again I'm open to suggestions.

Once the initial investment is paid off, the electricity is almost free: a small amount for maintenance, and probably a small stash to cover the replacement cost at the end of the unit's life, but no fuel costs and the units pretty much run themselves.

But generally, it's a good investment. You win hands down.

So, how come they get away with charging extra? They're not adding huge amounts of off-line storage. They might be building gas plants to handle those windless nights, but I've not heard of any - I think they just let the grid soak it up.

Will the 'Green tariff' subscribers be getting a rebate once the plant is paid off? Or are they just getting stiffed?

(Or am I missing the point entirely? It's been known...)

[Massacure]

5. Where do you get those figures from?

[Dead_Parrot]

7. purely top-of-head...

The only one i'm fairly sure of is wind - there was a thread on it a while back.

Like I said, open to suggestions :D

[dcfirefighter]

6. Utility Pricing

has nothing to do with supply and demand, and therefore has very little to do with production costs.

Even in an ideal market situation, wind power would be priced at the margin of consumption. While the producer's marginal cost of production may be miniscule, the cost for a competing producer would set the price paid by the consumer. For example, if I had a wind turbine, bought and paid for, I wouldn't charge you for MY costs, i'd charge you for your next best option. If I charge too much, someone would likely invest in a wind turbine - if I hadn't already monopolized the local populace's tolerance for views of turbines.

[Dead_Parrot]

8. Yeah, that's sort of the way it looks...

Ho hum.

[dcfirefighter]

9. It's not that bad...

One advantage of the Capitalist system is that it encourages firms to take a chance and risk their investment, in hopes of receiving a profit.

The fault is in failing to recognize those benefits firms recieve from the state, and making them pay for them. For our example (wind turbines):

The turbine owner recieves permission to disturb views and make noise. While the turbine owner usually must pay for these privileges somehow, he almost certainly doesn't have to continue paying for them - the cost of the state-granted privilege was smaller when the turbine was built than it was years later when more people had moved in and had their views and noise disturbed.

The powerline owner recieves permission to occupy a particular right of way. Again, while he must pay for this permission (generally to the previous onwer), he generally has to pay a one time cost, rather than a periodic cost - and this cost generally increases with time.

This problem becomes clearer when we consider potential competitors:

If an 'old' owner occupies these rights, a 'new' owner would have to pay a new, higher cost to compete. The old owner doesn't have to be particularly competitive, as long as his state-granted rights are already paid for at the older, cheaper, sunk cost.

If a coal plant is down the road, receiving the uncompensated state-granted priveleges such as the right to pollute, it will be hard to beat his price. If the coal plant had to pay a periodic value charge on it's pollution, a new, non-polluting generator would be more competitive.

The effect of these privileges does not necessarily cause their recipients to offer lower prices, due to the previously mentioned price effect. They still offer their product at the price of the worst operational competitor. So the value of these priveleges, in effect, gets paid by the customer to the private recipient of privilege. If those recipients of state-granted privileges were made to pay the state for those privileges, they could not raise the price (still be set by demand and their competitors), however, the state would be recieving the value, in cash, for public use. In fact, the increased competitiveness of the market would usually lower consumer prices.