September 2, 2023

SIMPLE ECONOMICS:

We can use the free market to lower energy costs (DAVE JENKINS, 09/01/23, The Hill)

Patterned after the successful Reagan-Bush acid rain program, RGGI uses the same tools of free market competition that control prices and increase efficiency to accelerate energy diversification and modernization of monopoly utilities, which are unfortunately insulated from normal free market forces. [...]

The huge spikes last year in the price of both oil and natural gas due to the war in Ukraine demonstrated just how vulnerable globally traded fossil fuels, even those produced here, are to events halfway around the world.

Although the governor and the General Assembly recently took a long-overdue baby step toward utility accountability, passing a bill that requires Dominion to do away with extra charges known as "riders" from electric bills, far more is needed to protect Virginia ratepayers.

Only RGGI's market pressure can reliably lower costs in the long run, as it encourages diversification with cheaper energy sources that are not influenced by international conflicts or overseas demand. Solar and wind energy makes good economic sense because the fuel is free, unlike natural gas and coal. Electricity from coal and gas typically costs between $45 and $80 per megawatt hour, while new solar electricity with battery storage for nighttime generation costs under $20 per megawatt hour.

It's not just lower, more stable electricity prices that Youngkin is ignoring, it's the massive economic impact. Clean energy is expected to be a $23 trillion market by the end of this decade. Major companies in Virginia, like Mars, Nestle and Unilever, have voiced their support for RGGI because it provides market certainty and lower overhead costs.

Posted by at September 2, 2023 12:00 AM

  

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