Utah Near the Bottom
– By Howard Sierer –
Finally. After documenting in multiple columns (here, here, here and here) how Utah leads the country in a variety of meaningful ways, I found a ranking where we’re third from the bottom. But in this case, that’s a good thing.
Utah has the third-lowest statewide electricity rates, higher only than Idaho and Wyoming. So says an Energy Affordability Report from the American Legislative Exchange Council. While we all depend on reliable electricity service, no one enjoys paying the utility bill. Heads up Utah customers: you’re far better off than many of the nation’s rate payers.
What are we doing right? The ALEC report explains that “throughout the United States, electricity prices vary greatly, depending on the way it is generated, delivered to consumers, and regulated by demand sector and generation source across all 50 states.”
The report compares how states like Utah use free market principles and innovation to limit manmade atmospheric emissions while other states choose heavy-handed approaches, implementing statewide mandates, pricing schemes and subsidies that favor state-chosen technologies and industries.
The report tellingly notes that “whether it is mandates, subsidies, or some combination of both, when the government inserts itself into the energy markets, taxpayers wind up footing the bill.” A quick look at the report’s electricity rates table shows that heavily-regulated states do indeed have significantly higher electricity rates.
Per the U.S. Energy Information Administration, Hawaii has the highest rates followed by Alaska. Their remote locations and Alaska’s thin and widely spread population don’t allow for the efficiency of scale available in the “lower 48.”
Why am I not surprised that California has third-highest electricity rates in the country? California’s electricity customers pay 19.65 cents per kilowatt-hour while Utah customers pay 8.34 cents. Even in nearby Colorado and Arizona, electricity customers pay about 30% more than we do.
The report notes that government mandates clearly result in higher electricity prices. Ignoring the special circumstances in Hawaii and Alaska, the five states with the highest electricity prices are California, Massachusetts, Rhode Island, Connecticut, and New Hampshire. All five of these states have adopted Renewable Portfolio Standards and cap-and-trade carbon emission programs as have 18 of the 20 highest.
Should electricity customers in these high-cost states feel good about doing their part in reducing greenhouse gas emissions and look down their noses at those near the bottom? In too many cases, the claimed environmental benefits are far less than advertised. Progressive Vermont provides a textbook example of “virtue signaling” while disguising its less-than-stellar environmental impact.
Vermont boasts that 100% of the electricity produced in the state is generated using renewable energy sources. Hydropower provides 50% of the in-state generated electricity and it has five utility-scale wind farms producing another 14%.
However, before praising Vermont as an environmental ideal, I was shocked by the clear environmental impact caused by the source of the next 23% of its so-called renewable energy. It comes from burning – yes, burning – “biomass.” In Vermont, biomass generally means trees, counted as renewable energy because replacement trees can be grown.
However, burning biomass releases almost 50% more carbon dioxide into the atmosphere than coal and over 300% more than natural gas. Hypocritically, the Regional Greenhouse Gas Initiative of which Vermont is a member does not count the carbon dioxide released from biomass. The obvious result: RGGI states choose burning biomass to generate electricity over cleaner sources such as natural gas.
Another of Vermont’s dirty little secrets: in 2014 the environmental left shut down the state’s nuclear reactor, which was supplying about 50% of the state’s electricity. As a result, the state now imports about 75% of its electricity, in effect exporting environmental impacts to other states. All the supposed virtue of the state’s renewable energy applies to only 25% of its electricity requirements!
Vermont may be the most egregious example of state environmental virtue signaling but by their very nature, government-mandated environmental requirements invite, and in some cases even encourage, “creative” accounting and compliance reporting.
The ALEC report sums up the obvious: “There is a strong correlation between big government policies and higher electricity costs.” I’m glad that Utah is near the bottom of the electricity cost list.
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