You have read a lot about the effect of artificial intelligence databases on electricity prices, but rates began rising before most Americans had heard of AI. Now politicians are attempting to soothe their constituents over high costs for electricity and playing the blame game, but Jonathan A. Lesser reminds readers of the policies many states have put in place that led to skyrocketing prices for power. He writes:
It’s not “dangerous policies coming out of Washington” that have raised energy costs for New Yorkers but virtue-signaling state policies on climate change. And, despite the new regulations, utilities will still be required to achieve the state’s unrealistic and costly zero-emissions goals.
Start with former Governor Andrew Cuomo’s 2014 ban on fracking. While Pennsylvanians enjoy low-cost natural gas, New York’s ban—together with its refusal to allow new natural gas pipelines into the state—has forced residents, businesses, and power-plant operators to pay more for natural gas.
In 2021, Cuomo forced the shutdown of the Indian Point nuclear plant, even though that plant provided low-cost, zero-emissions, safe, and reliable electricity to New York City for decades. The natural-gas-fired generating plants that replaced Indian Point are more costly and have increased greenhouse gas emissions.
The state’s renewable portfolio mandate also requires electric distribution utilities to purchase renewable energy “credits” to meet mandatory percentages of electricity that must be generated from wind and solar power. The state’s 2019 Climate Leadership and Community Protection Act increased those percentages. Since then, electric ratepayers have shelled out more than $3 billion for the credits.
Lesser goes on in greater detail and discusses more states and their policies. I encourage you to read his full piece here.
There should be no surprise when politicians artificially restrict supply, and then prices climb. That’s Econ 101.
Action Line: So what can you do? Well, you can move to a state where politicians aren’t placing restrictions on power companies, or you can put some power away in your pantry by building your own microgrid. Click here to subscribe to my free monthly Survive & Thrive letter.
