CRI News


Your action needed to control electricity prices
5/3/2019 David T. Stevenson, CRI Director

A bill is expected to be proposed this year to greatly increase a government mandate for more wind and solar power. A hearing has just been scheduled to be held in the Senate Hearing Room in Legislative Hall in Dover Friday, May 10th, from 10 am to 1 pm, to listen to public comment. The comments will be used to support a bill to be released in May. You can bet supporters of this expansion will be out in force. We need free market advocates to come out in large numbers to oppose this expansion.

You must submit comments in writing before you speak, and will be allowed one minute for comments, or two minutes if you represent an organization. If you wish to submit Power Points or charts, or can’t make the meeting, you can submit the material by 10 am, May 9, to Senator McDowell’s Legislative Assistant, James Berryhill at James.Berryhill@delaware.gov . It works best if you make original comments. As an example, the comments I will make follow below.

In summary, the RPS is an anachronism with 90% of the new wind and solar built nationally last year outside of RPS mandates because utility scale wind and solar are now competitive, though potentially limited by reliability issues. It is not a jobs program as more jobs are destroyed by higher electric rates than are created by a small number of solar installs with 90% of our RPS being met by out-of-state projects, or natural gas powered fuel cells. The RPS is a transfer of wealth from lower income families to higher income families, now costing all Delmarva Power residential customer’s an average of $125 a year, three times a promised price cap. In real life only about 3% of electric customers voluntarily pay any premium for wind and solar power when given a choice. It is an expensive way to reduce carbon dioxide emissions costing thirty times as much as a current Delaware emission allowance. RPS advocates simply don’t trust people to make their own decisions, or the free market to work. It is time to end the RPS, not to expand it!

The path to more renewable power in Delaware is competitive, market driven, utility scale solar farms. For direct residential and commercial participation in low cost solar obstacles need to be cleared to building community solar farms. A community solar bill would remove the requirements that the entire project must be subscribed to start building a project, that all customers must be on a single feeder line, and increase allowed system size from 2 megawatts to 5.

Background:

  1. 1)  Most local green jobs involve installing small solar power systems. Solar industry reports show labor costs on small systems, including installation, sales, marketing, and administration might total $3,400. However, subsidies redirect $5,700 in higher electricity prices to cover Delaware grants, and 20 year Solar Renewable Energy Credit contracts (at net present value), and another $6,000 in federal tax credits. The money spent on higher cost electricity and taxes would have been spent elsewhere creating many more jobs.

  2. 2)  Electric customers were promised their electric bills would not increase more than 3% for the RPS, but bills exceeded the cap in 2012, and are now adding 10%. According to the National Renewable Energy Laboratory, supplier based premium priced, voluntary green energy programs around the country show only about 3% of customers are willing to pay anything extra for wind and solar power. Only 354 Delawareans signed up for such a program as of 2017, showing very little real support for green programs.

  1. 3)  A recent study from the University of Chicago, “Do Renewable Portfolio Standards Deliver”, shows the typical reduction cost for a ton of carbon dioxide from wind and solar projects is at least thirty times higher than Delaware’s current average tax on carbon dioxide emissions ($130/ton vs. $4/ton).

  2. 4)  New solar and wind utility scale systems are competitive with each other, and with other forms of new generation, and no longer need state subsidies to compete. Even residential solar generation prices are coming down with Solar City cutting the price by 30%. Also, instead of putting solar panels on homes, it is possible to buy into community solar projects that offer prices below utility supply prices, but regulatory obstacles limit this option in Delaware.

  3. 5)  The 2019 RPS requires 19 percent of electric demand be met by select renewable power sources, but in- state solar, biomass, and wind only account for about 2 percentage points. Bloom fuel cells, using conventional natural gas, and out-of-state wind and solar farms account for 17 percentage points. So, 90 percent of the mandate has been met, with a billion dollars in subsidies from Delaware electric customers, to mostly support out-of-state, and non-green jobs.

  4. 6)  Only 11% of national wind and solar sales were RPS driven last year according to a recent Woods- Mackenzie study. The free market is working.

  5. 7)  PJM runs our multi-state electric grid, and their study found up to 30% maximum intermittent wind and solar power can be integrated into the electric grid without causing reliability issues, close to the current RPS goal of 25% by 2025.