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  • Outside the Beltway: Austin Electricity Consumers Paying More for Renewable Energy

    Austin, TX

    Our latest post takes us to Austin, Texas. Consumers are suffering from higher electricity prices, stemming from a renewable energy push that allows consumers to opt into plans to buy their electricity from renewable energy. The problem is, people aren’t buying it anymore, because it’s too expensive. The obvious solution? Spread the costs to all consumers. A recent article in the American-Statesman elaborates:

    For the past decade, Austin’s ambition to become the world’s clean-energy capital has been best exemplified by one effort: GreenChoice, a program that sells electricity generated entirely from renewable sources such as wind.

    Now the nationally renowned program is struggling to find buyers — the latest allotment is 99 percent unsold after seven months on the market — and Austin Energy is looking for ways to bring down the rising costs.

    Austin Energy officials say that times have changed and that the nation’s most successful (by volume of sales) green-energy program, which offers the renewable energy only to those who select it, might no longer be the best way to carry out the city’s goals. It now costs almost three times more than the standard electricity rate.

    “It was our intent to use it to stimulate the market for renewables, which it did, and then eventually phase it out,” Roger Duncan, the head of Austin Energy and the chief architect of GreenChoice, said. “It was never intended to go on forever.”

    Duncan said part of the solution might just be adding new wind, solar and other renewable-energy projects into the bills of all Austin Energy customers, which could increase rates for everyone. He said there are also numerous other policies being considered but declined to discuss them, saying only that they will be proposed publicly in the near future.”

    Government subsidies for renewable energy is only necessary because renewables are too expensive to compete in the market otherwise. In effect, the government is forcing costlier energy options on electricity consumers. Since renewables are lavished with substantial tax breaks, a national mandate will cost Americans both as taxpayers and as ratepayers. Clearly, when consumers are given the choice, they are going to opt not to pay for pricier electricity. But unfortunately for consumers in Austin, they may not have a choice, as the costs may soon be spread to all consumers.

    Moreover, subsidies are poor policies because they distort normal market forces and encourage government dependence. By subsidizing a portion of the actual cost of a non-competitive project, the government is artificially making it cheaper. In doing so, they distort the allocation of resources by directing capital away from more competitive projects.

    Duncan went on to say, “I think it’s time to sit back and look at the philosophy behind GreenChoice.”

    The same could be said for the whole green movement.

    Posted in Energy [slideshow_deploy]

    15 Responses to Outside the Beltway: Austin Electricity Consumers Paying More for Renewable Energy

    1. Mary Magni, Rockport says:

      Didn't Obama say that when he was elected the electricity rates would go sky high. He wasn't lying was he. You weren't listing were you.

    2. David E Aldridge, Da says:

      Everybody said it was a rattlsnake, but nobody listened. Now that they've picked it up, guess what? It's still a rattlesnake! I'll be darned, there was no "change you could believe in", they are still a nest of rattlesnakes.

    3. Thomas, Sackets Harb says:

      A few miles from my home, they are planning to build 100 windmills on an Island in Lake Ontario. I'm puzzled about how the developer can sell the financing for this project, if it does, in fact lose money. Or – is the local power grid required to purchase this electricity. Combining that requirement with whatever federal subsidies are available, does the project itself show a profit, while marketing a non-competitive product? This would seem to be the case, which means that, even though no one wants to buy this electricity, all electric customers are subsidizing the additional cost that must be paid to the generating company. So, this additional cost, added to federal subsidies, means that every time we see one of these projects go up, we will be paying more for our electricity, even if we don't choose the "green" power. These things don't get built for free, someone has to be making money. I'm pretty naive, but isn't this the scam?

    4. Mike, Winston-Salem says:

      Here in North Carolina, our wonderful legislature passed a bill requiring 12.5% of our energy to be produced from "renewable" sources. A few months ago, Duke Energy announced that they were going to purchase 16 megawatts fro a "solar farm" near Lexington to meet the requirement. Now Duke Power is before the NC Power Commission asking for a 12.6% rate hike… don't you just love this "green energy"… someone's getting the "green", but it sure isn't the consumer!

    5. Pingback: » Financial News Update - 07/14/09 NoisyRoom.net: Where liberty dwells, there is my country…

    6. Pingback: Outside the Beltway: Austin Electricity Consumers Paying More for Renewable Energy « Conservative Thoughts and Profundity

    7. Jeff, Cincinnati says:

      Nuclear power needs to be looked at again. All of the fear mongering from the sixties and seventies needs to be dispelled by scientific facts. Properly built and maintained nuclear reactors would be a very efficient source of electric power.

    8. Jerry, Indiana says:

      As Mike mentioned, the consumer is the one who, in the end, gets the raw deal. I'm beginning to think that the "green" movement won't be content until even the blue in the American flag gets changed to green.

    9. Ken St Louis says:

      Ah, GREEN I was watching Bill Oreilly last nite and heard him say that he believes in global warming! I wonder if he still believes in the tooth fairy too!! I am 70 years old, I can still remember playing outside on Xmas day when I was 11 or 12 in a T shirt it was so warm in St Louis. So much for global warming. ( Its just another halfway hidden tax )!

    10. Lynn B. DeSpain says:

      Of course it costs more! it takes more energy to produce it, store it, and to manufacture the geration process than any other systems we have been using for over one hundred years! Water is much more dynamically powerful than wind! It is a constant flow, whereas wind varies. Hydroelectric creates dams for faming irrigation and lakes for recreation and for city water consumption, that would otherwise be seasonal. Wind is seasonal ond only generates electricity!

      Fission type Nuclear energy requires enriched uranium and only makes two things, electricity and Plutonium. Plutonium is only good for bombs and is really hard to story, since its half life is around fifty thousand years or so.

      No one every speack or tries Fussion type Nuclear energy, because it only requires simple atomes, say Hydogen. The only byproduck, outside of Einstiens true E=MC(2), most efficient, is helium! Of course, sooner or later the world will run out of its only source of hydrogen, water. Keep in mind that we have the same amount of water on Earth as we did at the time of Moses.

      Mankind should stick to what it knows and does best, and that is using the natural flow of free energy the cheapest way available. This includes Natural Gas, and Natural Oil, Coal turned into Charcoal, and Water!


    11. Dan - York, SC says:

      As I ask my high school honor students in replying to their questions about "green energy", What happens when the wind doesn't blow and the sun doesn't shine? You can't make a river and geothermal energy is not available everywhere. We are crossing the threshold to the absurd and surreal!

    12. Jack, AK says:

      Yet, if the government was truly interested in "green energy" they would use nuclear.. Here is some thoughts about why nuclear is a good idea.

      First, it has an enourmous potential fuel source. Fast neutron, or breeder, reactors can utilize about 99% of the potential energy in nuclear fuel. Given the current efficiency of the light water reactors of 5%, that alone should show the increase in fuel availiability.

      Second, the feared plutonium could be used as fuel. The plutonium and the tranuranics would be burned away.

      Third, the amount of radioactive waste and the storage time would be reduced. Burning most of the material with long half-lives reduces the amount of time that the nuclear waste would be dangerous to only 500 years. The waste itself from a fast reactor would be about 1% that of a thermal reactor.

    13. Dusty, TX says:

      Yeah, go ahead and spread the misery to everyone. After all, it's only Austin.

    14. Marshall Hill MI. says:


    15. John Burdick, Glendo says:

      I have solar on two homes and it works great for me……unfortunately, it is very expensive and the much ballyhooed stimulus money is nothing more than bogus puffery. If the politicians want to do something they can offer real incentives, including the requiirement that utilities buy excess energy produced at wholesale from the homeowner/producer.

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