by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor, John Locke Foundation
The Charlotte Observer reported last week that
Duke Energy wants to pay North Carolina solar farm developers 15 percent less for their electricity than it now does, according to filings this week. …
Duke says this year’s lower rates are a result of falling natural gas prices.
Renewable energy rates are based on the costs that utilities avoid by buying energy instead of generating their own or buying it elsewhere.
In North Carolina’s case, costs are calculated for operating gas-fired combustion turbine power plants. As natural gas prices dropped in recent years, the cost of running the plants fell.
“Customers save when Duke Energy can purchase power at a realistic price,” Duke spokesman Randy Wheeless said. “We believe our filing reflects the best data on how these prices should be set.”
There is an organization telling legislators that the state’s renewable energy mandate is doing this — “electricity costs are expected to be lower than they would be had the state’s utilities not incorporated more clean energy resources and programs beginning in 2008.” How are they reacting?
The N.C. Sustainable Energy Association, which promotes green energy, said lower rates “will make it more difficult for developers to finance clean energy projects.”
So how can all these things be?
How can natural gas be putting downward pressure on the price of solar when the advocates of more solar energy are saying that solar is putting downward pressure on the price of electricity?
How can the advocates of more solar energy be pushing for higher rates than necessary for solar energy when they are busy lobbying the General Assembly that solar energy is causing electricity prices to be lower than they otherwise would be if utilities had more freedom to choose energy sources?
It’s a real mystery.