Tuesday, November 28, 2006

Pollution Free Electricity!

I just switched my electricity provider to a pollution free provider, with 100% of the electricity generated by wind. And the amazing thing is that I'll actually be paying less for pollution free electricity than for my previous electricity. In the last six years, I've watched my electric rates skyrocket from 9.2 cents/Kwatt-hour to 15.2 cents/Kwatt-hour. During that same period, pollution free electricity stayed constant around 15 cents/Kwatt-hour.
I would have never expected pollution free electricity to be cost competitive to non-pollution free electricity, but it has. There are two main reasons for this. First, non-pollution free electricity is generated from non-renewable resources such as natural gas. With natural gas prices rising significantly in the last few years, electricity rates rose with it. Because no non-renewable resource is consumed with pollution free electricity, the cost should either stay constant or decrease (due to advances in technology). The second reason for the higher prices is due to deregulation of the electric companies. Deregulation should bring more competition and result in lower prices, but it hasn't. With deregulation, electric companies are less likely to invest in new power plants because recuperation of the capital costs are not guaranteed.

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