Posted on 10/05/2011 9:10:36 AM PDT by Diana in Wisconsin
(Utilities across the country need more money for grid updates and pollution controls, and are passing the huge bill on to consumers. Laura Colarusso on why electricity bills are rising.)
Already weary of high gas prices and 9.1 percent unemployment, many Americans are about to get another kick in the wallet thanks to large increases in their electricity bills.
From Alaska to Georgia and Wyoming to Florida, utilities are seeking permission to pass on hundreds of millions of dollars in new charges to customers to help upgrade aging infrastructure and build new or retrofitted power plants that comply with tougher environmental regulations, a Daily Beast review of regulatory filings has found.
The influx of requests, many still pending before state regulators, has left energy experts convinced that electricity prices will be on the rise for the foreseeable future as the industry struggles to modernize its aging infrastructure.
“They desperately need to upgrade,” says Bill Richardson, the former New Mexico governor and Clinton-era energy secretary who once famously called America a superpower with a Third World power grid. “You’re seeing rate hikes everywhere because this is a widespread, national problem.”
The pending rate hikes are bad news for poor and elderly Americans on tight budgets, as Congress and the White House begin making cuts to programs that help people cope with their utility bills. One program in particular, the Low Income Home Energy Assistance Program, was slashed during the budget negotiations earlier this year, and is slated for even deeper reductions this fall.
During the budget battle, Congress cut $500 million from the program to bring this year’s total to $4.7 billion, down from a high of $5.1 billion in 2010. For next year, the Obama administration requested only $2.6 billion, leaving states with roughly half the assistance they’ve had in the past. The White House rationale relies on the assumption that energy prices will decline, but regulatory filings have indicated the opposite trend is in store.
In the latest round of budget negotiations, House Republicans have suggested adding $822 million on top of Obama’s request for next year, but the gap could still result in rationing.
Already this summer, Illinois cut back on its energy-assistance grants, forcing seniors and poor families to forego air conditioning during the sizzling August heat. And governors of cold-weather states such as Michigan’s Rick Synder and Maine’s Paul LePage—both Republicans—are fighting the drop in funding, warning that people could freeze. Northeastern Democrats are equally concerned by the president’s proposed cuts.
“During these tough economic times, it is critical that we both fully fund LIHEAP and ensure that states have timely access to the funding they need,” Rep. Rosa DeLauro, D-CT, says. “These changes could prevent states from being able to respond quickly to severe cold weather and leave the most vulnerable Americans out in the cold.”
The Beast’s review of regulatory filings found at least 16 utilities covering 6.1 million customers are seeking rate hikes of 5 percent or more. Almost half of those want increases of 10 percent or more.
And several more utilities already have received approval for large increases.
For instance, close to three million customers in parts of Virginia, Kentucky, Ohio, and West Virginia that get their electricity from American Electric Power have seen their rates increase between 48 and 88 percent over the last few years. Those rates are expected to rise an additional 10 to 35 percent in the next three years. The reason? AEP officials are quick to blame environmental regulations that they say are going to cost the company $8 billion in compliance and upgrades.
AEP, which operates in 11 states, says it is raising rates because it needs the cash to upgrade its infrastructure. The company plans to retire five coal plants—which amount to 6,000 megawatts of generation— and build at least two natural gas plants by the end of this decade.
“None of this is cheap,” says Mike Morris, AEP’s chief executive officer. Morris predicts that rolling brownouts also could loom on the horizon because the current system can’t keep up with demand, which is expected to grow by 44 percent by 2035.
Electricity rates were static for most of the 1990s and early 2000s. According to the Energy Information Administration, the average residential customer saw his or her bill increase just seven-tenths of a cent per kilowatt between 1998 and 2004. Between 2005 and 2010, the average price spiked about 2.5 cents and then flattened out over last year as natural gas prices dropped, EIA says.
Dozens of factors affect rate increases, but one of the biggest is that much of the transmission system was built at a time when the radio was still the main form of entertainment. The power grid simply can’t keep up with modern demand as more people use more appliances, computers, and gadgets.
*SMIRK*
Seriously, I have worked very, very HARD at getting my electric bill down from a high of $400/month (ex ran a business out of here) to the $120/month it is now. I, myself, have little wiggle room left for higher utility costs.
(Good thing I look smashing by candlelight, LOL!)
Baraq and several members of his cabinet (Steve Chu and Lisa Jackson) are ON THE RECORD as favoring high energy prices.
Republicans need to use this as a sledgehammer in advertising in the 2012 elections.
To all the fixed incomer’s that voted for Obama, SUCKERS.
Ex? Ex??? Does this mean you are available???
};^P>
Didn’t we already see a couple of spikes due to the green energy pacts some of our midwestern democrat governors signed?
Let’s be clear. This problem can be laid directly at the feet of the Obammunists.
I saw her first.
Last winter, in the name of “conservation” my idiot natural gas company decided to charge more per unit the more you use. It was not based on the size or age of the building. Just a number they pulled out of the air..
Needless to say, my business that is in a old drafty building got hit with this rate that was 4 times higher than the lowest rate..
I dumped the gas company like a bad habit and switched to electric heat. (6.1 cents a kilowatt hour)
Now I think I’ll buy a wood stove and go to my inlaws and chop some wood.
Ours has been close to $200 per month all summer. Our home is about 1300 sq feet. We cannot take much more of a “hike.”
Coal stoves are good, too. No chopping. Good Wyoming coal.
ya but I’m in Minnesota ;)
I could go with a corn burner. LOTS of corn in MN.
I hear ya! I’m down to bare bones and have been out of work for 6 weeks due to an injury, so that’s 6 weeks of pay I’m out, too. Grrrr! That’s really gonna hurt my bottom line...
It’s getting increasingly hard to be my usual Pollyanna self around here!
The whole idea is to break the back of the the American people and to try and make them give up and not fight this stuff. Little do they know. Most companies worth their salt, puts away a certain percentage of their income for upgrades and improvements. If the electric companies haven’t done this, they should be forced to do so.
Why, yes. Yes, I am. I’m ‘between engagements’ at the present. :)
Freepmail me with your best offer because I’m not going to be on the market for long, LOL!
:)
We could nurse you back to health...
Cuts in LIHEAP will force many poor people from their homes. They’ll go to public housing and get, for example, $800/month year round for rent instead of $400 a month in two or three winter months. Taxpayers will pick up the tab.
The clunker homes they lived in will deteriorate further, in many cases.
I’m old, beat-up, broke, unemployed, worn out, used hard and put away wet. What’s not to like?
(Did I mention homely?)
Can you make a decent Martini? That’s REALLY what’s most important in a relationship, LOL!
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