For the past 30+ years, I have been monitoring my energy bill here at home, and with the advent of the internet, I’ve been able to track personal and statewide data on energy costs. I did this mainly for the classes I was teaching, making students aware of the energy they use, how they use it, what it costs, and what it meant to use energy more efficiently. As some of you know, I live in an old farmhouse built around 1885; and I have done reasonable upgrades to make it more energy efficient…ie. ceiling, floor, and some wall insulation, double pane windows, cfc light bulbs, etc. We live comfortably with all the amenities we need…computers, TV’s, stereos, microwave, dishwasher, hot tub, and so forth, and over the last two cold winter months, our electricity use averaged 450KWH/month, well below the national averages.
We pay PG&E 13 cents/kwh…a price that has not really changed over the past twenty years. Out of this charge:
30% goes to electricity generation (the wholesale price today was about 2 cents/kwh here in the west; this price does fluctuate depending on the season, etc.
44% goes to transmission and distribution…the cost to keep power lines up and running
12% goes to public purpose…education programs, low-income help, community stuff
1% goes to nuclear decommissioning…for both Humboldt Bay and Diablo Canyon
13% goes to pay off the deregulation boondoggle of 2000…more later
Very reasonable…$50-60/month for the comforts of flicking a switch…actually our biggest expense is probably the electrically heated hot tub and the fridge to cool the beer!
As for natural gas, we use it for our cooktop, heating water, and our forced air heater. We have a wood stove which we use a lot when we are home, but we are spoiled to click that heater switch first thing in the morning, and Susan does like the house a bit warmer than I do. PG&E charges us $1.16/therm…the wholesale price today is 21 cents/therm. Even though natural gas is the cheapest it’s been in 30 years, I guess PG&E has to make up the costs associated with their flawed gas pipeline program over the past 50 years!
The big mystery is how does the energy industry come up with the “price” that is put out on the market. The wholesale cost that the California ISO purchases and resells to the utilities is an “average” of all generation costs offered for sale. Old hydro plants might produce electricity at less than 1 cent/kwh; while the Diablo Canyon nuke might be putting out its kilowatt/hours at 14 cents (which it did back in the late 90’s and early 2000’s.) So more expensive solar, wind, and nuclear are balanced out by cheaper natural gas and hydro. There is also the consideration as to how these generating plants operate. Today, California is expected to use 28,000MW of electricity at it’s peak usage time of 9pm. Around 5pm, this demand is going to be around 25,000MW. There is another 10,000+MW available as standby, just in case everyone decides to flip switchs at the same time. Back in 2000, the standby was 53,000MW. These peak power plants sit idle 90% of the time, and only come on when the high demand is there…hence their cost is very expensive. The whole power plant equation has changed dramatically in California in the past 10 years, primarily due to efficiency in supply and demand, and the use of renewables which tend to generate electricity during peak demand. So, even though solar is in itself expensive (why? Will be discussed later), it is still the best buy today outside of natural gas (the price of which is at the mercy of the free market and the gas companies, and can change anytime.)
This summer looks to be interesting in southern California, due to the fact that unit 1 of the San Onofre nuke will probably not me restarted. That’s 1000MW of baseload, that will have to be made up some other way…a Chinese company is looking to build a huge solar plant in south Nevada to sell renewable electricity to California!
The economics of energy are very complex (especially the price of gasoline, oil, etc) and I’ll post more later.
http://www.bloomberg.com/energy/ (look at the ticker at the bottom)