Cost of Electricity Rising in Wind Power States

from Forbes

Electricity prices are soaring in states generating the most wind power, U.S. Energy Information Administration data show. Although U.S. electricity prices rose less than 3 percent from 2008-2013, the 10 states with the highest percentage of wind power generation experienced average electricity price increases of more than 20 percent.

According to the U.S. Energy Information Administration (EIA), the 10 states in which wind power accounts for the highest percentage of the state’s electricity generation are:

Iowa – 27%
South Dakota – 26%
Kansas – 19%
Idaho – 16%
Minnesota – 16%
North Dakota – 16%
Oklahoma – 15%
Colorado – 14%
Oregon – 12%
Wyoming – 8%

The wind power industry claims switching from conventional power to wind power will save consumers money and spur the economy. However, data from the top 10 wind power states show just the opposite. From 2008-2013 electricity prices rose an average of 20.7 percent in the top 10 wind power states, which is seven-fold higher than the national electricity price increase of merely 2.8 percent.

The 2008-2013 price increases in the top 10 wind power states were:

Iowa – 16%
South Dakota – 25%
Kansas – 26%
Idaho – 34%
Minnesota – 22%
North Dakota – 23%
Oklahoma – -2%
Colorado – 14%
Oregon – 16%
Wyoming – 33%

With the sole exception of Oklahoma, every one of the top 10 wind power states saw its electricity prices rise at least 14 percent. For each of these states, electricity prices rose at least five times faster than the national average.

The electricity price increases in states producing the most wind power don’t tell the whole story. Federal and state taxpayer subsidies to wind power producers hide additional costs of wind power. The federal wind power Production Tax Credit (PTC), for example, gave wind power producers 2.3 cents for every kilowatt hour of wind power production last year. With U.S. retail electricity prices at 10.08 cents per kilowatt hour, the PTC allowed wind power producers to hide over 20 percent of wind power costs. This allowed the wind power industry to charge the American people still more money in backdoor tax bills, in addition to the higher retail electricity prices documented above.

Higher electricity prices in states producing the most wind power are taking a devastating toll on disposable incomes and the overall economy.

In Colorado, for example, electricity consumers spent $5.3 billion on electricity in 2013. Had Colorado electricity prices risen at merely the national average from 2008-2013, however, Colorado electricity consumers would have spent only $4.8 billion on electricity. That’s $500 million in excess electricity costs in 2013. If we divide that up among Colorado’s 2 million households, the extra electricity costs drained $250 from the average Colorado household in 2013.

In Minnesota, electricity consumers spent $6.4 billion on electricity in 2013. Had Minnesota electricity prices risen at merely the national average from 2008-2013, however, Minnesota electricity consumers would have spent only $5.4 billion on electricity. That’s $1 billion in excess electricity costs in 2013. If we divide that up among Minnesota’s 2.1 million households, the extra electricity costs drained $476 from the average Minnesota household in 2013.

In Kansas, electricity consumers spent $3.8 billion on electricity in 2013. Had Kansas electricity prices risen at merely the national average from 2008-2013, however, Kansas electricity consumers would have spent only $3.1 billion on electricity. That’s $700 million in excess electricity costs in 2013. If we divide that up among Kansas’ 1.1 million households, the extra electricity costs drained $636 from the average Kansas household in 2013.

The wind power industry’s fallback position is wind power benefits state economies, despite rapidly rising electricity costs, because the switch from conventional power to wind power generates jobs within the wind power industry. This argument, however, amounts to nothing more than a misleading head-fake. Shifting electricity production from conventional power to wind power does not create any net new jobs – it merely shifts jobs from one sector (conventional power) to another sector (wind power). Jobs created in the wind power industry come at the price of eliminating jobs in the conventional power industry.

Worse yet, the jobs shifted to the wind power industry fail to equal the number of jobs eliminated in other sectors of the economy for two important reasons.

First, wind power employs very few workers. After the tremendous start-up costs necessary to build wind turbines and place them in industrial wind farms, operational wind power facilities employ few workers. Nor does wind turbine manufacturing adds many jobs in top wind power states. Of the world’s top 10 wind turbine manufacturers, only one is located in the United States. Wind turbine manufacturing jobs are created in places like Germany, Denmark, and China more than in the United States.

Even among the top seven manufacturers of the wind turbines that are deployed in the United States, only one is located in the United States.

By contrast, conventional power plant operation requires far more workers than wind farms. More jobs are created in the conventional power industry even while electricity production costs go down. And unlike wind power jobs, nearly all U.S. conventional power plant manufacturing and operational jobs go to American workers – and especially to workers within the resident state of the conventional power plant.

Second, higher electricity prices caused by wind power kill jobs throughout the entire state and national economy. For example, when the average household in Kansas spends an extra $636 on electricity each year due to unnecessarily high electricity prices, that means the average Kansas household spends $636 less on other goods and services. The aggregate effect of such reduced spending in the Kansas economy (equaling $700 million in Kansas economy-wide reduced spending in 2013) eliminates thousands of jobs that would otherwise be created or sustained throughout all segments of the Kansas economy with higher consumer spending.

Any way you cut it, wind power is needlessly raising living costs, reducing living standards, and destroying American jobs. Fortunately, states can easily rectify the problem by repealing renewable power mandates and taxpayer subsidies that perpetuate higher electricity costs and widespread job destruction.