Ratepayers and Renewables: Clean Energy Protects Ratepayers

Green and renewable energy have become buzz words in politics and the media as evidence of global warming grows. They have also become increasingly important in discussions relating to how utilities meet their power needs. This makes sense, as utility companies are the distributors of energy (both “green” and “brown” alike), but utilities have not always been so closely linked with renewable energy. Just a few years back, when alternative energy sources were still largely theoretical or experimental, utilities didn’t talk much about renewable energy. Utilities are now forced to talk about renewables, as the state has mandated a Renewable Portfolio Standard (RPS) which sets a minimum percentage of their load that must be met by renewables.

Yet, despite all the talk in the news about the benefits of green energy, renewable energy is still often more expensive than energy produced by traditional fossil fuels. Utility customers who buy into the renewable options offered by their utility company pay extra for energy backed by Renewable Energy Certificates (RECs). In a time when money is short, why should ratepayers care about renewable energy resources? CUB offers five reasons:

1) Utility Prices: First, while the switch to renewables may cause an increase on energy prices in the short term, they are also generally more stable than prices for natural gas and other fossil fuels. Also, prices of existing renewable energy sources are expected to decrease as the technologies mature and production becomes more efficient.

In contrast, as the state and federal governments increase carbon premiums, prices for “brown” energy will go up. This policy, of course, is meant to persuade utility companies to decrease their carbon emissions and to switch to renewable resources. When renewable energy resources have been developed to the extent that they are efficient, competitive in price, and capable of fulfilling the majority of the utilities’ loads, utility rates will stabilize—at a lower price than if the companies used resources high in carbon emissions.

2) Future Investment: Thus, money spent on renewable energy is an investment in the future. The hard truth is that fossil fuels are diminishing resources. As those resources become scarcer, the United States needs to have access to energy resources that can meet 100% of its needs. Even if fossil fuels don’t run out for another 100 years, the prices will go up as they become scarcer. Investing in renewable energy resources now will make energy more affordable in the future, as the cost of energy from fossil fuels becomes more uncertain.

3) Environment: Of course, the environment is another reason ratepayers should be interested in green energy. About a third of carbon dioxide emissions in the United States comes from electric utilities. By substituting green energy for energy produced by coal or natural gas, consumers significantly reduce the amount of greenhouse gases that are emitted into the atmosphere. The interests of ratepayers and the environment are not mutually exclusive.

4) Pubic Health: Even those who question global warming or don’t expect to be directly hurt by it should still be worried about pollution for health purposes. Research shows that pollution from “dirty” electric plants can hurt humans directly. A report commissioned by the Clean Air Task Force showed that fine particle pollution from U.S. power plants prematurely ends the lives of nearly 24,000 people each year, including 2,800 from lung cancer. The pollution is also responsible for hundreds of thousands of asthma attacks, cardiac problems, and respiratory problems per year, as well as about 38,200 non-fatal heart attacks. Cleaning the environment isn’t just about helping the flora and fauna—it’s about keeping humans healthy, too.

5) Local Economy: Lastly, ratepayers should care about renewable energy resources because they often represent local resources, produced within the state or region by the local labor force. Whereas the coal used to produce electricity purchased by Oregon ratepayers is imported from out-of-state, wind, solar, and biomass projects in Oregon represent new living-wages jobs and tax revenue that benefit Oregonians. Renewable energy has the potential to be good for your pocketbook, your health, and our state.

We at CUB are advocates of clean, affordable energy because we believe it benefits ratepayers both in terms of fostering future energy stability and promoting a healthy environment for them to live in. We constantly fight to keep utility prices down. However, fighting for low rates without looking at the larger energy picture does not serve ratepayers well. CUB promotes affordable, clean, renewable energy resource development in Oregon when we can show that the investment brings value to consumers and benefits ratepayers in a variety of ways that outweigh the higher short-term costs.

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