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.
Barack 'O'Bunga' Obama's promise to the American people and he is working overtime to keep it.
I have been told that my looks improve significantly in total darkness! ;-)
No, but I do make a really indecent Brandy Old Fashion!
The hard wood ash can be used for soap, pelting, buck skin, baking soda, and garden lyme later, when we can't afford to buy them anymore. A loaf of bread will cost an entire days wages.
Too bad about those on the public dole. They'll just have to eat.....nothing. No one will be able to support them anymore, either. Too bad for them, because they're the ones who voted for it.
In PA we were convinced that deregulation of electric would lower our electric rates, until the reality hit with rates going up 30+%. Our former regulated electric co is free to invest big dollars in Latin America.
I’m not sure what their problem is as far as efficiently operating a business and serving legacy customers that made them the globalist corp that they now are. I’m still locked into paying the company that runs the wires and reads the meter a lot more money.
Just like Obama and the Federal Reserve these corporations put international interests in front of America.
You didn’t answer about your Martini-mixing skills! Who cares about that other stuff, LOL!
LOL! :)
Hey! I just got OUT of one of those ‘triangle’ relationships. Of course, my cheatin’ b@stard of an ex-HUSBAND didn’t bother to TELL me that there was someone else until I figured it out for myself.
He also didn’t bother to tell me that they had been systematically draining all of our business and personal joint accounts either, so I’ll have to say ‘NO’ to THIS little arrangement.
But thanks for including me, LOL!
“Too bad for them, because they’re the ones who voted for it.”
It may be cruel, but I cannot WAIT to see the LibTards in ‘The People’s Republik of Madistan’ starving to death...sadly, it won’t happen, but a girl can dream, can’t she? :)
Barry will be well remembered for this and so many other disgraceful things he did to damage this great country.
Thanks, Barry.
I'll bake you guys a cake with a file in it, LOL! :)
Cool! That looks like a fruitcake. It’ll be easy to smuggle that into the prison. No one would suspect that anyone could jam a file into a fruitcake.
Hiyas.
Congrats on the bill situation.
We got an Eden Pure heater last year. It does help with heating costs, but we don’t use electricity.
Call the US “The Little Match Girl” nation.
http://www.online-literature.com/hans_christian_andersen/981/
People will have to choose between heat, food and housing. Gee. Thank a Democrat and 0bama/Biden for eviscerating American basic survival needs....all except clothing (not including cotton prices): food, clothing and shelter. Right?
Meanwhile, the 0bamas live higher on the hog than many of the wealthiest people in the world. Their “senior staffer” kids, too.
What does it run on?
I misspoke. It’s electric. We use natural gas for heat.
We can keep different rooms at lower temps, which helps, obviously. We’ve also noticed that the heat radiating feels better, not quite as good as wood, but different than our regular heat in winter.
Apologies. Too tired tonight.
Thanks, I was confused.
The good news is that nat gas is cheap and likely will get cheaper. They are finding it everywhere here in the Great Lakes region via fracking.
They just built this pipeline a few yrs ago and ALREADY are talking about reversing the flow.
http://www.pipelineandgasjournal.com/rockies-express-pipeline-may-reverse-flow-move-shale-gas
See post #36...
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