The following opinion piece, by Ann Donnelly originally published in The Columbian, reviews the findings of our report, “The Crippling Costs of Electrification and Net Zero Energy Policies in the Pacific Northwest.” Read the report here and watch the documentary here.
Oregon’s and Washington’s legislatures have passed electrification mandates, with deadlines for net-zero emissions by 2040 in Oregon and 2030 in Washington, and for carbon-free emissions by 2040 in Oregon and 2045 in Washington. But what will these mandates cost? Until now, we haven’t known.
We finally have an educated estimate, based on sound modeling, transparent methodology and reasonable assumptions. But the sponsors of the study are not those responsible for knowing the answer, such as state policymakers, Bonneville Power Administration or the region’s utilities.
The study — The Crippling Costs of Electrification and Net Zero Energy Policies in the Pacific Northwest — is a publication of the Discovery Institute’s Center on Wealth & Poverty (September, 2024). Authors Jonathan Lesser and Mitch Rolling are economists qualified to model long-term supply, demand and costs.
An accompanying documentary, produced and narrated by longtime local industry executive Ken Peterson, can be viewed at www.reasonable.energy/cost.
What do electricity rates have to do with the balance between wealth and poverty? Electricity is a necessity in homes and businesses, and for industrial processes. A reliable, affordable supply is essential for individuals’ access to wealth and health. Lack thereof is associated with economic decline, poverty, illness and homelssness.
In our region, increased utility costs must be passed on to residential, commercial and industrial customers. Steep rate increases may be unsustainable to already pressured low- or even midincome residents. Businesses may be forced to pass higher rates to their customers, and industrial facilities may be forced to shutter or move some facilities.
At the Discovery Institute, the authors are transparent as to their process of analyzing the costs of Oregon’s and Washington’s electrification mandates. In the 40-page report, they methodically estimate electricity demand growth through 2050, then the additional costs of the needed new generation, storage and transmission, and finally how the additional costs would flow to customers.
They compare three scenarios: Renewables Only (wind, solar, plus storage), Lower-Cost Renewables (assuming renewables’ costs decline over time), and Natural Gas Plus Nuclear, using some fossil fuels and nuclear to meet demand.
They sum up the major costs to be recovered through rates by 2050 — capital, operations and maintenance, taxes, and utility profit. For the two renewable cases, the additional costs total $550 billion and $418 billion. For natural gas plus nuclear resources, just $86 billion, one-fifth to one-six the cost of using renewables only.
The authors explain that “huge quantities of wind and solar capacity are required to compensate for their inherent intermittency and potential unavailability when electricity demand peaks.” Wind and solar are also challenged by the costs of more resources to recharge large batteries.
“The effect on customers’ electric bills will be devastating,” using renewables only, the authors warn. A typical residential customer’s bill will increase by 450 percent from now to 2050.
Finally, the authors compute that “clean energy legislation will have no measurable impact on world climate,” using the EPA-sponsored climate model.
In Oregon, the House Committee on Climate, Energy, and Environment recently heard a similar warning from Rep. Ken Helm, D-Beaverton: “We cannot continue to believe our own PR, that we have been successful in promoting a renewable electricity future. We are not heading in that direction and we’re going to have to take action …”
Our region’s legislators and utilities can no longer avoid discussing the question with the public: what will electrification cost?