Shocked, Shocked Over Electricity

It’s never a good sign when a newspaper article starts out like a magician’s act. Journalists should not imitate the art of the illusionist; namely distraction and trickery to make the audience believe the unbelievable.
Last week in the Laconia Daily Sun, newspaper president and city mayor Ed Engler tried his hand at magic using not a rabbit and a hat, but his electric bill. He seemed shocked to discover that his electricity provider breaks down the cost of supplying each kilowatt-hour into a few basic components. As was clear to anyone paying close attention, this was the equivalent of waving his left hand while his right hand was unobtrusively moving the bunny into position.
We’ll get to the bunny in a moment. First, let’s dissect the distraction.
If you pay a utility bill, you know that the costs are broken down into components. It’s a government mandate. For electricity, those components include the cost of generating the energy itself – the kilowatt-hours used during the billing period – and the cost of transmission, fees, taxes, and government mandates associated with getting the power in a useable form from the generating source to the meter attached to your home.
The same could be done for something as simple as a head of lettuce. While the government doesn’t mandate it, cost components could be itemized for bringing fresh produce to market. That $1.74 for a heart of romaine is made up from the cost of growing, harvesting, packaging, storing, shipping, marketing, and selling. Everyone managing the supply chain, from the soil in the Salinas Valley of California to the produce display in your local supermarket, knows at least the costs and margins of doing his part to provide you with your salad.
The fact that the we as consumers don’t have to know this is part of the magic of the market. For electricity, the government requires utilities to break the illusion, so to speak. We can be thankful that the same isn’t true for groceries, or our checkout register tape would be a mile long.
Complaining about the high price we pay for electricity is the first step in trying to find ways to lower our rates. In the Sun article, Mayor Engler urged “everyone to start paying close attention to their electric bills in order to understand what we’re paying for and why” so that we can do something about “the ridiculous cost of electricity” in New Hampshire.
After griping about his bill, Mayor Engler then pivoted to one of the most-costly, least-efficient methods for adding electricity to our grid: Solar. Voila, a bunny!

Solar-generated electricity is the Welfare Queen of energy production. It requires subsidies and special treatment to make ends meet for the few who benefit from it. Those subsidies start with tax breaks for residential solar installations and end with “net metering,” in which the government mandates utilities buy the power generated by solar at prices far above market rates.
Even in the desert southwest, solar can’t compete with our abundant supply of fossil fuels. Arizona has 193 clear days a year compared to our 90, and sufficient sunshine reaches the ground 85% of the time there during daylight hours but just 54% here. Of course, at night it’s 0% in both states. Yet solar power in AZ requires subsidies and mandates, too, just to “break even.”
Whether it comes from small, rooftop installations or large, ugly ground arrays covering hundreds of acres, the numbers behind solar simply don’t work in favor of consumers or a reliable electricity grid. Worse, subsidized solar power distorts the energy market and adds instability to the grid, making it more difficult to develop a long-term solution.
But so-called “green energy” has a certain cachet; people want to believe in magic. Reality is a harder sell.
Improving the infrastructure for bringing more hydrocarbons to New England and building large-scale generating capacity upsets the NIMBY crowd. Fossil fuel advocates have the numbers on their side, but that isn’t a plus in today’s emotional climate-change climate.
Solar proponents miss the irony of their position. A recent study by the National Bureau of Economic Research suggests that increasing our reliance on renewable energy requires more fossil fuels, not less. Specifically, it requires adding fast-ramping natural gas plants that can fill in whenever renewable generation slips – like when the sun doesn’t shine.
America has been the world’s top producer of petroleum and natural gas hydrocarbons – reliable, affordable, and efficient sources of electricity – for the last 7 years. By focusing on solar’s high-cost energy contribution, the Daily Sun missed the opportunity to disabuse readers of the notion that solar is any kind of solution to our electricity challenges.
Look at your utility bill and get mad. But direct that anger where it belongs: The “green energy” magicians and the politicians who force us to subsidize them instead of dealing with reality.

Ken Gorrell welcomes your comments at kengorrell@gmail.com