Your electric bill could rise by as much as $800 a year in the next 10 years. But that doesn’t have to happen.
You may have heard about electricity costs skyrocketing. In just the past year they’ve risen more than inflation.
It’s more likely you’ve heard about one of the alleged culprits – new data centers being built across the country that will devour massive amounts of energy to power the coming artificial intelligence boom.
Don’t believe it. The blame lies elsewhere.
The real reasons for the coming rate increases
Here are the real rate-increase culprits:
- the Trump administration
- the Kentucky legislature, and
- the giant utility known as LG&E/KU.
Those three powerful forces are each pursuing separate strategies that are crushing the innovation that could help avoid such huge cost hikes.
Why would they do that?
What they say is that expensive, polluting, greenhouse-gas emitting fossil fuels like coal and natural gas are the only way to assure reliable electricity.
But that propaganda is becoming increasingly untrue. Because building new renewable energy now costs less than fossil fuels. And because large-scale storage battery technology can make solar power available even at night and wind in calm weather. Other out-of-the-box approaches to energy supply promise a variety of creative ways to keep the lights on.
The real reasons they oppose electricity innovation are a bit of a mystery. But there are clues.
One is polarized politics. President Trump has campaigned promising the coal and gas industries that he would restore profits and employment with his three-word energy policy of “drill, baby, drill.”
Similarly, the Kentucky legislature clings to a coal-mining culture that has been in a decline since Mitch McConnell first got elected to the Senate in 1985.
Both our state legislature and the Trump administration blame the presidencies of Joe Biden and Barack Obama, as well as the environmental movement generally, for policies they say have robbed coal-mining communities of income and a way of life.
It’s true that coal — its miners and barons — helped build America. For years, Kentucky could boast the lowest electric rates in the country.
But today, 10 states have lower rates than Kentucky. And we’ve learned a lot about the downsides of coal: black lung disease, toxic mercury and sulfur emissions, mountaintop removal, and deadly underground cave-ins. Most recently the effects of global warming have become more apparent. We’re all watching weather extremes, wildfires, even the heartbreaking flooding in eastern Kentucky. And to top all that off, the last ten years have been the hottest on record.
With such profound drawbacks to fossil fuels, and with renewable energy now cheaper, you’d think this would be a time for a broad national energy dialogue to chart our future.
But that’s not happening.
Instead, the Kentucky Legislature has made it harder for utilities to close uneconomical coal plants. And, the federal government is dismantling scores of clean energy projects across the country. In President Trump’s recent speech to the United Nations, he declared, “We’re getting rid of the falsely named renewables.”
It’s worth pausing to analyze that statement. At a time of rising energy demand, “getting rid” of a major source of new energy will only reduce supplies and increase prices. It also cuts off one of the quickest solutions to energy supply – wind and solar take much less time to build than coal or natural gas.
The coming rate increases are also expected to especially hurt states like Kentucky, which is heavily powered by the more expensive coal and natural gas. One study projects that while the average electricity bill in the U.S. will rise $170 a year by 2035, in Kentucky the increase will be $860.
Which makes LG&E/KU’s foot-dragging on renewable energy even more mysterious.
LG&E/KU could be a good neighbor and support the Louisville Metro Council’s 2020 clean energy resolution, calling for the area to be powered by 100% renewable energy by 2040. Or Frankfort’s by 2030. One way to take a huge step in that direction would be to build a field of solar panels.
Instead, in its long-range plan, LG&E/KU proposes to meet growing energy needs by building more fossil fuel generation. That plan is silent on any mention of global warming.
Big utility’s silence reveals their secretive decision-making
Could future rate hikes be reduced by using less-expensive renewable energy? LG&E/KU isn’t saying. At a recent hearing of the Kentucky Public Service Commission, one environmental activist referred to that secretive decision-making process as a “black box.” She said:
“LG&E/KU has had the opportunity to build solar over, and over, and over again … and every single time it comes up with an excuse. And they always point us toward … this black box called lowest-cost energy. I would love to have someone explain to me … how it is that over the lifespan of 40 years a gas plant that you put in today is less expensive, and you pay for gas as (the price of) that gas is volatile over time, how that plant is less expensive than a solar field that has no cost for fuel over that 40 years.”
It’s true that the data center boom will use a lot more electricity. And that supply and demand would normally mean prices would rise accordingly. Another truth is that new approaches to energy could reduce those cost increases. Those new approaches are being frustrated by the fixation on fossil fuels by the White House, Kentucky legislature, and LG&E/KU.
Here’s what they could be doing
There are better ways to manage costs. Some are happening right now, others show huge potential. Here’s just three:
Batteries gone wild
A logical and rapidly growing use of improved storage battery technology is to use it to store renewable energy. From home batteries for residential rooftop solar to utility-scale installations for wind farms and solar fields, it’s a proven win-win. What you may not know is that a lot of the utility-scale battery projects are being used to keep costs low – buying and storing electricity when prices are down, then using it during peak price times. And all those electric cars sitting getting charged up in people’s garages can provide a house with emergency power during an outage. That network of car batteries is already supplying power to help the electric grid get through power shortages. There’s even a name for it – the Virtual Power Plant market. It’s a lot cheaper than building new fossil fuel plants.
Power arrangers
Believe it or not the Artificial Intelligence industry isn’t stupid. They know they’re going to need a lot of power. Microsoft, Google, Amazon, Meta are already making massive investments in renewable energy. Some states require data centers to include green power in their plans. One game-changing idea getting serious consideration in the industry is this: what if a data center could get by without a 99.999% guarantee of reliable power? Many industries already pay lower rates by arranging for utilities to occasionally interrupt their electricity for short periods of time.
Forward to the future
New sources of electricity are blooming, while others are more pie-in-the-sky but worth encouraging because of their enormous promise. Kentucky has a small but worthwhile potential for developing hydro power. Getting geothermal power from underground is already being used in an innovative program at the Louisville airport. And deep heat deposits in the western United States could also supplement the power grid. Offshore wind farms are being built, despite White House attempts to kill them. Offshore wind farms promise massive amounts of new, highly reliable electricity.
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Unfortunately, due to the actions of the three powerful players we mentioned at the top, we all need to brace for the impact of much higher electricity costs. But those projected increases can be reduced – and you can help.
- You can tell LG&E to take a kinder view of renewable energy.
- You can tell your elected officials you care about the environment, and your electric bills.
Power doesn’t just have to come from a utility. It can also come from the people.
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