Wind-Generated Electricity Continues to Win Out Over Coal

There has been a consistent upward trend for wind-generated electricity in Texas. As the Electric Reliability Council of Texas has recently reported, the industry is continuing to invest in renewable energy for the long haul.

ERCOT states that wind-generated electricity in Texas has beaten coal by 1% so far this year. That means that wind was responsible for 22% of all of the electricity generated in the state. Coal represented 21%.

Of course though, natural gas is still ahead of the pack at 38%. And it accounted for 44% last year, so it’s safe to assume that it will be the leader for years to come while renewable sources like solar and wind continue to rise.

Now, a lot of analysts have chimed in, sensing that wind’s current placement in the rankings is because of uncharacteristic weather. And that could certainly be the case come the latter half of this year. But the data has been consistent across recent years that renewable energy sources like wind in particular are to be viable and robust agents of change in the Texas electricity economy.

As ERCOT pointed out in 2016, wind topped 15,000 MW. That record-setting mark is just a glimpse at how the electricity dynamic is shifting, and will continue to shift as it has since the start of the millennium when wind sources hadn’t represented even 1% of Texas power.

Some Reasons for Wind’s Recent Rise to Power

As Smart Energy International points out, Texas has the most potential for wind generation in the entire United States. A large part of this is the consistent and often chaotic winds that buffet the Texas locale.

As this article states on the wind power of Texas, the state has more than 12,000 wind turbines. This means that “the state’s $40 billion private industry also employs a quarter of the nation’s wind-energy employees.”

Because of these considerable investments in wind energy, it’s no surprise that wind energy has climbed so steadily over the years to just now surpass coal in the first half of this year.

Forecasts for Renewable Energy

CNN states that Texas produced a quarter of the nation’s wind energy in 2017. And as the U.S. Energy Information Administration (EIA) continues to forecast, they think that solar and wind will continue to grow the fastest in the next two years compared to other sources of energy.

As the EIA states in this report, “This projected growth is a result of new generating capacity the industry expects to bring online. About 11 gigawatts (GW) of wind capacity is scheduled to come online in 2019.”

So, the future looks very wind-driven for Texas electricity, and by extension, the nation’s power will continue to be built around renewable sources.

Electricity Rates Are on the Rise Across the U.S.

Electricity rates are on the uptick across the country. According to a report by the U.S. Energy Information Administration (EIA), 78 of 89 utilities proposed a rate increase to their regulators.

To put this number into perspective, the 89 utilities that requested rate changes from their regulators represent almost half of the entire electricity utilities in the country.

In accordance with the law, regulated electric utilities need permission from their regulators before any rates are changed. Historically though, regulators only approve a fraction of the requested rate changes. This means there’s a real disparity between the proposed rates and the delivered changes.

But overall, this begs the question, why were so many regulated utilities requesting price increases in the past year?

Why Rate Changes Are Being Requested

Regulated utilities have needed to request higher rates because of infrastructure costs, electricity generation and delivery, as well as equipment-related costs (among others).

As the EIA states in the aforementioned report, the surging rate increases is a result of higher electricity delivery demands. Electricity delivery is getting more expensive because modern systems for customer information and billing, sustainable energy modifications to equipment, and a more modern grid require a lot of financial support.

Electricity generation also factors into the rising asking price for electricity rates:  nuclear power plants are expensive to operate and maintain as well as ramped up environmental compliance costs.

Events That Lead to Rising rates

When considering large events that necessitate a rise in rates, look no further than these examples provided by the EIA. They state that there haven’t been this many requests for rate changes since the Oil Embargo of 1973-1974, the partial nuclear meltdown at the Three Mile Island plant, and the PURPA Act of 1978.

And recent events like Hurricane Sandy and the Northeast Blackout of 2003 have meant that regulatory bodies are allocating more money for improving the grid and less for reducing the costs for electricity generation and delivery for utilities.

But these complications and rate proposals don’t affect a huge sector of the electricity industry: the deregulated electricity providers in Texas. In fact, none of this is really the case for retail electric providers (REPs) in deregulated parts of Texas.

The Difference in a Deregulated Market

If a REP in a deregulated market wants to adjust their own rates to offset infrastructure costs or increase their revenue, they can do that. But local competition naturally curbs any sharp spike in rates.

Because electricity in deregulated parts of Texas is customer-centric, there are natural pressures to keep prices low. After all, higher rates will drive customers away to the nearest competitor.

So, as the proposals for rates keep increasing for regulated utilities, the invisible hand of the free market continues to self-regulate in various parts of Texas.

We will see how 2019 shapes up as the data is collected.

 

US Families are Struggling to Pay Their Electric Bill

trouble paying electricity billsMore than 30% or US families are having difficulty paying their monthly electricity bills.

According to the most recent report by the Energy Information Administration, 1 in 3 Americans are struggling to pay their monthly electric bill. Although geography played very little into whether or not a household was struggling, there was a very clear racial division between those that could easily afford their electricity, and those that could not.

Nearly 20% of Americans had to cut back on food, medical or other necessary purchases in order to pay their electric bill, and more than 10% had to keep their house or apartment at an unsafe temperature in order to try to keep their heating and cooling expenses within reach.

Of the households that were struggling to pay their electric bills, half of them had annual incomes of less than $20,000, and more than 40% had at least one child living there.

Racial minorities made up an extremely large portion of the struggling families, with about half of the group being African-American, and 40% being Hispanics. A 2016 study found that African-American and Hispanic households tended to pay more for the electricity per square foot than the average household.