Sound The Alarm! Auction Results Say Your Electricity Rates Might Rise Double-Digits by 2025.
The United States demands more electricity every year, and we aren’t building enough infrastructure to support it. Here’s what you can do to protect yourself.
Wow! Days after I wrote my last blog post I see it fitting in quite nicely with my next. Canary Media reports that the latest energy auction spelled disaster for electricity generation prices in the Mid-Atlantic region. Why is this happening? And how does it affect you?
Electricity is a big industry. A GIANT industry. One with many moving parts. The company you get a bill from every month is not the same company that produces the electricity. These are known as “local utility delivery providers” and “energy generation suppliers”, respectively.
To explain this in the simplest way possible- the former must buy electricity on preset, contractual amounts, obtained once every six months from an “auction” involving the former. This auction brings together suppliers and “deliverers” as they “work it out”. In-between these two entities are transmission companies, those who bring the electricity from the plant to local neighborhoods.
Well, this is all fine-and-dandy, right? Since delivery is competing with other delivery, and generators are looking to sell contracts amid other generators, everything works out? Well, not exactly. PJM is the sole company that manages the transmission for roughly 13 states, from the Great Lakes to the Mid-Atlantic. They held their energy auction last week. I’ll let the quote below tell you the rest…
PJM’s territory- spanning from New Jersey to Illinois to Kentucky.
“The prices earned by participants in this year’s capacity auction were 10 times higher than in last year’s auction. This jump will lead to higher electricity costs for PJM customers. It will also send a clear signal to the energy industry: Build to meet the need for reliable energy and you’ll be rewarded.”
Yes, a 10x spike in the cost of capacity. This is unprecedented in the realm of electricity. It’s something that everyone in the renewable energy industry has been sounding the alarm on for years. Today, our prophetic assumptions are aligning with reality. So, your electricity is becoming WAY more expensive, but why?
There are two distinct reasons. Both, in conjunction with each other, have exacerbated this recent spike. First, the United States is simply demanding more electricity. Most of us saw this coming. We want electric cars, electric trucks, all electric houses and apartment buildings. The recent add-on to this is AI data centers, only increasing the demand. The other reason is largely blamed on PJM, who’ve lacked in interconnecting (approving new wind farms, solar farms, and power plants and attaching them to the grid) A LOT of new generation projects to its grid. Here’s what they have to say about who’s going to end up paying for this-
“The cost of these delays is ultimately borne by households and businesses on their utility bills.”
Hey, Canary Media, how much do you think a homeowner’s bill will go up by the end of next year?
“‘NRDC estimates that PJM’s capacity bill will rise from $2.4 billion to about $14.7 billion due to the results of last week’s auction. That could increase wholesale energy costs by as much as 29 percent starting in mid-2025, when the capacity purchased in that auction is due for delivery’, Rutigliano said.”
So, it turns out that those pesky doorknockers were right. (Yes, I’m a doorknocker. Although, I don’t consider myself “pesky”)
The good thing is—and I’m sure you’ve guessed where this is going—there is an alternative. For a mere zero dollars extra, you can forget about everything I just said and provide your house with a fixed rate using solar energy.
A solar PV system is the true competition for something like this. We are stuck with our local utility providers, and selection of generation suppliers is often limited in price difference. I don’t want it to sound like I’m blaming our local utilities (the names you see on your bill, like “Penelec” or “PPL”) as they are also a victim to this catastrophe. However, as they pass on these electricity prices to consumers, it angers us just as must as it frustrates them.
So, what will you do? Entertain the idea of another rate increase from a bill you must pay? Well, I guess you don’t have to pay it, but then your house would be dark…and your shower would be cold…and your house would be 85 degrees.
How it will look inside your house when you can no longer afford your electric bill.
As shown by today’s shocking auction results, we are on the upper banks of sh*t creek, and we just put our boats in the water. The good thing is— you can still reach over and grab a paddle before the current takes you.
See what solar can do for you. Get started with the button below.
https://www.canarymedia.com/articles/transmission/prices-just-spiked-in-the-biggest-us-power-market-blame-the-grid-backlog
This blog is reflective of my opinions, which are 100% rooted in fact to my best ability. These words are not intended as libel against any entity mentioned in this article and should not be counted as such.