The cost of renewable energy

Charles Steele Contributor
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It’s a scorcher out there—not only for the hundreds of thousands of Americans who are experiencing a record heat wave, but for future electricity prices, as well.

With record 100-plus temperatures in many parts of the country, particularly the East Coast, demand for electricity is very high. As CBS News reported, the high demand for electricity to cool homes and businesses could overwhelm the grid, causing power outages when energy consumers desperately need electricity to power air conditioners and fans.

Yet many consumers—especially low- and fixed-income consumers, elderly consumers, and families in urban areas—simply do not have the luxury of lowering the thermostat when they are already struggling to make ends meet.  For elderly consumers and consumers in urban areas with poor air quality, the heat wave is not just an inconvenience but also a matter of life or death if they don’t have affordable, reliable electricity.

The electricity grids aren’t totally overwhelmed by the heat wave yet, primarily because energy companies rely on a variety of sources in different states, including traditional sources like coal, gas, and nuclear. By using these traditional sources in conjunction with other sources like renewable sources, many consumers can survive the occasional heat wave.

However, some members of Congress are attempting to cut back on the use of these affordable and reliable sources of power and switch to an energy plan that relies heavily on renewable resources. A number of energy proposals—including the Waxman-Markey bill that passed the U.S. House last year—have included a federal renewable energy standard that would force states to procure as much as 20 percent of electricity from federally mandated renewable sources. If Congress passes such a standard, all energy consumers, regardless of age or income, will suffer a heat wave due to lack of access to reliable, affordable power.

Though it’s a worthy goal to incorporate more renewable sources into the power grid, requiring states to use the same percentage of the same renewable sources doesn’t make sense from a cost or a reliability standpoint. For example, Xcel Energy and six other utilities recently found that the cost of transmission of wind energy to 11 states across the Midwest could cost over $20 billion in the next 20 years. These transmission costs will be passed on to the consumer in the form of more expensive electricity bills.

While some energy consumers may be able to afford the additional costs of mandated renewable energy, the majority—especially the low- and fixed-income consumers I mentioned above—will not. Since low-income consumers already spend 1/5 or more of their after-tax incomes on energy costs, they will suffer when their energy bills rise. When you add a heat wave, or other severe weather like a snowstorm, to the mix, energy costs will become unbearable for these consumers.

In fact, many groups have spoken out about the harmful impact of a federal renewable energy standard on low- and fixed-income consumers. The Catholic Diocese of Austin, for example, said that Austin Energy’s “aggressive plan to purchase more wind, solar, and wood-waste energy” could raise energy costs as much as 50 percent. This will cause severe hardship for the low-income families that the Diocese assists.

The heat wave is uncomfortable, yet it is a clear reminder of the need to seek affordable, reliable power for consumers. If some states are able to affordably and reliably implement renewable sources, they should. But a federally mandated renewable energy standard would be seriously detrimental to energy consumers, especially the consumers that already have difficulty paying their energy bills. As Congress debates the energy proposals over the coming weeks, I urge our leaders to consider the cost and reliability of such proposals, in addition to the environmental impacts.

Dr. Charles Steele Jr. founded Working People for Fair Energy, a non-profit organization devoted to fighting for energy laws that are fair and affordable to working people and low-income families. He has served in the Alabama state Senate, and re-elected three times before resigning to become president of the SCLC in November 2004. He has been inducted into the Martin Luther King, Jr. Board of Preachers of Morehouse College and the Tuscaloosa Civic Hall of Fame.