State of the Planet

News from the Columbia Climate School

Paying extra for electricity, feeling like a sucker

I couldn’t have been happier when, back in October, my local electricity company offered me the chance to switch to alternative energy.  The colorful advertisement from Consolidated Edison was festooned with windmills and said the switch would lead to only a 10 percent increase in the average family’s electricity bill.  Here was a chance to significantly and cheaply reduce my carbon footprint – I felt all warm and tingly inside.

Not so a few days ago, when I received my first bill since the switch, revealing an eye-popping 200 percent increase in the cost of electricity.   The cost of a kilowatt hour of electricity had increased from 7.4 cents to 22.2 cents.  A frugalist (some would say cheapskate), I wondered why I had volunteered to incur this extra cost, in these trying economic times, and especially when, as a graduate student, I have zero income.

Looking at my bill, I feel like a sucker.  I’m paying more for electricity than my neighbor without getting any benefit (other than the tingliness, which has quickly dissipated).  That’s because the extra money goes to wind power, but none of the wind power – or very, very little of it – comes back to me.  The wind power generated in upstate New York and Pennsylvania goes into the grid along with electricity generated from coal, nuclear and natural gas.  Of course, the grid can’t direct the “clean” electrons to my Manhattan apartment. So I’m essentially subsidizing a little bit of wind power for everybody – how lovely!  As explained by the ConEd subsidiary administering the alternative energy program, my payment does make a difference, because it shows that there’s demand for wind power.  As more people sign up, the more windmills get built.

Should I be paying more for wind, but not my neighbor?
Should I be paying more for wind, but not my neighbor?

And yet, something still doesn’t seem right.  I have no guarantee that enough people will sign up so that more windmills get built and alternative energy gets cheaper.   In the meantime, the wind power I’m paying for gets dispersed across millions of households.  Ideally, ConEd would increase rates on everyone, since we all benefit from emissions-free energy.  In a way, my feelings are not unlike those that led the Bush administration to pull out of Kyoto (stay with me).  Bush basically said the United States should only pledge GHG reductions when China and India commit to doing the same. And I feel I shouldn’t pay extra for alternative energy until my neighbors do the same. Obviously, I’ve simplified for the sake of analogy, but I am now slightly more understanding of the Bush administration’s position (and just in time, too!).

So what to do back in New York?  For 10 days I had witheld the 300-percent price hike from my roommate and girlfriend, Kaitlin.  A few nights ago, during dinner, I broke the news.   I said that we should wait another month before switching back to the old energy plan, since ConEd had indicated that the price for wind power fluctuates.  Maybe the cost of wind power would go down …

“Absolutely not,” said Kaitlin, who, while eco-concious, isn’t in the financial position (she’s a writer) to be unecessarily paying more for electricity.  “We shouldn’t be subsidizing other people who can better afford it.”

In many aspects of our relationship, Kaitlin’s word is final.  But I control access to the utility account, hahaha.

So I’m going to wait things out, see whether the bill goes down – and hope Kaitlin doesn’t read this blog.  After all, the 300-percent price hike equated to about $15 extra for the month, almost the cost of going to the movies.  Americans have been spoiled by cheap energy, and we’re going to need to get used to paying more so that we can pollute less.  Maybe I should view the extra $15/month as a down payment on a clean-energy future that will ultimately cost us less in terms of averting climate change’s worst effects. Then again, shouldn’t you be footing the bill, too???

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Stefan Rahmstorf
15 years ago

In principle you are right – the costs of clean electricity should be paid by everyone. After all, we (and our children, grand-children, …) will all have to pay the price for the consequences of the CO2 emissions, which are hidden costs of supposedly cheap electricity.

But while not everyone has to pay for this yet (as is to some extent the case in Germany, where all consumers pay a little extra, about 1 cent per kilowatt-hour, to subsidise renewables), you can be part of the avant-garde that pushes for renewables by creating a specific demand. Whether you get those specific electrons in your socket that come out of a wind-mill is irrelevant – electricity in a sense is a currency like money, and in a financial transaction you don’t usually demand to get a specific 10-dollar note – you just want your 10 dollars.

Two comments on the cost: wind power from reasonably good sites costs about 5 cents per kilowatt-hours, so I don’t understand the 200% price hike – this seems entirely unjustified, and here in Germany getting green electricity only costs a few % extra, not 200%.

But – due mainly to taxes – over here everyone pays more than those 22 cents per kilowatt-hour that you are complaining about…

Final point: cutting your electricity consumption by two thirds (not hard, with efficient appliances and switching off unused gear) will get your bill back to normal even at the price you are now paying.

Wakefield Electrician
15 years ago

So about $21 for a month, and that is with the 200% increase!!!!!! Wow. It costs me around £50 a month for electricity ($70) and I think we do pretty well…