Watch Out Plug-In Fans, Electric Rates are Going Up

The big potential of plug-in hybrid cars is that they’ll operate for long distances on electricity drawn from the home. That will save consumers pain at the pump, where prices are at record highs. But what happens when electric power sources see a price hike too?

That’s what’s predicted. The Energy Department says rates could rise 15% in 2008, the most in history. In contrast, last year they rose 2.3%. The price hike is due to the high price of coal, which fuels a majority of electric plants in the U.S. The high prices come from new international demand for the fossil fuel, even though it’s fairly abundant in North America. Other factors, like bad weather in coal-producing countries like Australia and China, are also fueling the spike for 2008, which may subside once those issues are resolved.

Some of the areas that will be hit hardest are places where electricity is derived almost exclusively from coal, including West Virginia and Kentucky. 

It looks like we’ll all have to get our calculators out once plug-in hybrids go on sale to see if we’re spending more at the pump or at the outlet.

Coal price hikes boost electric rates, more increases coming (ChicagoTribune)

Comments

[LM]

This is why we need to build renewable energy sources quickly and vastly. We need huge wind farms and solar fields as far as the eye can see. Our political leaders need to wake up to this fact not 5 years from now, but today.

[ziggy]

A 2.3% increase in my electric bill is much easier to handle than a 10 cent increase in gas. 2.3% in of my elctric bill is about $5 a month while a 10 cent increase in gas is about $30 a month.

[Amuro Ray]

In many US states/counties/cities, there are commissions to regulate the cost of electricity. Yes, this doesn't mean that there's NO increase, but if you compare increase in gas $ vs electricity $, you are looking at gas $ going up every week, or even day, at more than 10¢/gallon, vs a few dollars increase/month. Besides, at least there's "someone" to keep an eye on and regulate the situation, because all of us use electricity (other than those...oh what do they call...those that live their lives without using any modern technology), so this affects everyone (otoh, not everyone drives). Moreover, there are many ways you can keep your electric bill down, and that includes power companies giving you special discounted pricing (e.g. using electricity during off peak hours) - something that I've yet to see from petrol companies...

Energy prices will keep go up in long run - that's another exception case on "things change forever," but it's a question what sort of energy will have prices jumped like crazy...

[Jack]

I've worked in the utility industry all my life, here are my two comments:
1. We are in this position because a certain political party prevented; more drilling, more refineries to come on-line, more nuclear reactors to be built.
2. If you think electricity is going to be expensive, you haven't seen anything yet. Trust me when I say water is the new oil.

My company, a major US utility owns both wind and solar "farms" and it's crystal clear that they are not nearly efficient or cost effective enough to make a sizable contribution. When you hear about wind and/or solar think ethanol...that other bs political play that won't work long term. Wind/Solar would be fine as a minor supplement, but that's the extent of it.

[Amuro Ray]

I think u r right on the $, Jack. Also, when comparing oil to electricity, there's 1 pt that no one here has mentioned - u don't really have to worry 'bou electricity running out - we have various means of producing electricity, be it sthg that's dangerous or not (such as nuclear plant). Same, however, can't be said about petroleum.

Water - we can purify, even though cost is high, but not THAT high such that we can't afford. Petroleum - too impractical in term of $ to produce synthetically.

[kent beuchert]

Let's see now. The Chevy Volt travels 5 miles on 1 kilowatthour of power, which costs, national average, 8 cents. That's 1.6 cents per mile. A 20MPG average car is currently paying over $3.50 per gallon or 17.5 cents per mile. Yeah, we'll sure need our calculator if that electric rate goes up, now won't we. This is why old fashioned car mags should stick to gas and oil and keep away from making stupid comments about EVs.

[Phil]

Did I hear the author even mention NUCLEAR?? The future is nuclear with reprocessing and plug in hybrid transportation systems. Anything else is mainly just wasting time and money.

[Dave T.]

Phil,
We've mentioned nuclear in other discussion of electric power. It isn't relevant to the article here because there is no way to quickly build new nuclear plants to help with electric costs. In fact I don't believe there are any proposals to build a new nuclear plant in the U.S. at all in the foreseeable future.

Some countries like France are building a new generation of nuclear plant because they believe that is the way to go. While countries like England are working on massive hydro-electric solutions in the ocean.

[Dave T.]

Kent,
You're quoting a Volt figure from a car that hasn't been built yet with electric prices that might spike and a car with 20 mpg instead of a traditional hybrid which would be the closest comparison and is twice that efficient at 40 mpg.

And there will still need to be gas put into the Volt as well if not minimal.

I'm not saying you're not right, that the electric price will be less, maybe significantly so. But no one has fully tested the drain on an electric grid from plugging in hybrids on a large scale and what that will do to electric demand in places that aren't Kentucky and West Virginia.

[Phil]

Dave,
There are a dozen or more applications for licenses to the NRC for new nuclear facilities in the United states, mainly in the Southest, with many more to come. Nuclear and plug in hybrids are the future and are going to be aggressively pursued.

[Dave T.]

Phil,
And do you honestly think any politician will let one be built in his/her back yard? I'm not saying the new generation of nuclear plants aren't safer, but public perception is what has kept one from being built in the past 20 years.

Supposedly Iowa is slated to get two but have they broken ground? I'd have to dig into it.

Again, I'm all for new nuclear power and I think what England is doing with hydro electric in the seas is interesting as well. I'm just a "I'll believe it when I see it" type of guy.

[Jack]

Dave you posted, "In fact I don't believe there are any proposals to build a new nuclear plant in the U.S. at all in the foreseeable future."

There are 30 nukes that the US will bring on-line in the next 5-7 years. This is largely dependent on how my party, Democrat, plays along. Since 1979 the Cons have put forth 11 attempts to pass funding to build nukes. Each time it was defeated by the lack of Democrat support until the President got it through with some Dem support in 2005.

England is building 15 nukes with the first four coming online by 2012. Hydro pales in comparison. Japan will have 5 live by 2009, China 30 by 2020 and even Pakistan will have 8 by 2011.

My party has good intentions, however they have done more to block nuclear advancement than anyone else. That's why you will be paying through the nose for your utility bill over the next 5-7 years. I work for the largest utility in the country so thankfully I get a discount. It's embarrassing that our country harnesses the top nuclear expertise (GE, B&V, etc) however most of it was applied in helping France. If we had put that expertise to work here your utility bill would be 1/5 of what you pay today. That's how much cheaper nuke is when compared to coal, oil, natural gas.

[Phil]

Dave and Jack,
One more question. I've heard that when plug in hybrids are using all of that off peak electricity (hopefully mainly nuclear) that our electric bills will go down per kwh due to higher over-all utilization of the total generating capacity. What is your take on that?

[Red]

France is 85 percent nuclear generation and they repeatedly reprocess the spent fuel and use it again, unlike this country, where what would be an energy source becomes a problem. We will see new nuclear plants in the U.S. - even the co-founder of Greenpeace now supports nuclear and goes on speaking tours to promote it. FYI Dave T., the federal government is granting license extensions to nuclear plants all over the country - why wouldn't a new one be approved?

[Bloke]

Do you any of you guys have any actual experience working with Nuclear? That does not mean working for a utility, but actually building or possibly working at a facility or maintaining one? Every seems to jump on the nuclear idea as great. I think it is a very plausible idea, but as ethanol started out looking so great at first, we can see it is not really a great alternative now.

[Kyle]

I have a quick question though. Alot of pro-EV people (me included) have said something along the lines of, "and it will especially cost less if you plug in at night during off-peak hours!" Now, I just may not understand what peak hours are, but, if everyone gets a plug-in EV and does it at night then don't those "off-peak" hours kind of become PEAK hours? If everyone goes EV, I doubt there will really be any off peak hours. Am I at least half-right in thinking this?

[Phil]

Kyle,
Right now the electric utility industry is relatively underutilized and inefficient in that they have facilities to generate up to the peak load middle of the day and mainly sit idle in th middle of the night. No factory in other businesses could do that and stay competitive. If their generating capacity were more fully utilized all day and all night they would be billing for much more electricity and the over all cost per kilowatt hour would be significantly less with savings passed on to consumers. This is especially true with nuclear in that the cost of nuclear electricity is much less dependant on fuel expense than coal is. Off Peak nuclear electricity and plug in hybrids is the perfect combination with off peak wind contributing as well.

[Jack]

Phil,
The utility industry is not under utilized by any stretch of the imagination. Specifically, the grid is over utilized, hence the need for Regional Transmission Operators to instruct the utility generators on when and how much electric to generate and transfer.
If a large amount of folks plug-in at the same time (regardless of what you are plugging-in) then we will shift that period of draw to on-peak time which will reflect on-peak cost.

Wait until interval billing reads and smart metering become standard for all utilities. Your bills are going to go through the roof! About half of this country's utilities are currently equipping themselves to be able to do such by the end of 2008.

On Greenpeace: Who cares about them as the French and Japanese proved five years ago they are a non-entity.

On Nuclear Waste: Exelon and GE developed a nuclear reactor two years ago that develops ZERO nuclear waste. My own party (Dem) and various environmental groups fought the licensing process tooth and nail so Exelon ended up building it in South Africa. It goes on-line in July and has already passed all four of the inspections.

When you start to see sky high utility bills over the next six months you can thank your spineless politicians and the environmentalists. Perhaps you can comfort yourself knowing that the French pay on average 72% lower electricity rates than we do.

[Phil]

Jack,

Are all coal and nuclear generators in the country running full capacity at 3am?? If not wouldn't it be more cost effective if they were? I read somewhere that our present grid has the capacity to charge during the night 2/3 of all of our vehicles if they were plug ins without building another power plant. To me that means that our electricity infrastructure is underutilized.

[Red]

Phil is right - nearly half the nation's generation resources are available and unused during evening and early morning hours. The nation's utilities could easily power a substantial percentage of plug-in hybrid vehicles in our nation's fleet with existing generation resources. Jack is wrong about renewable energy - about half the states now have renewable energy requirements that will result in at least 20 percent of our electricity coming from wind or solar in the next 15 years.