Gas Prices Hit $4.08 a Gallon; Electricity Prices Soar

by Robert Farago

June 16th, 2008 8:45 PM

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gas prices hit 4 08 a gallon electricity prices soar

On the same day that USA Today reports that average U.S. gas prices have hit a new high, the paper has some bad news for plug-in hybrid electric vehicle (PHEV) fans who think they'll be able to tune in, turn on and drive off for pennies on the gallon: electricity prices are also heading skywards. "Utilities across the USA are raising power prices up to 29%, mostly to pay for soaring fuel costs, but also to build new plants and refurbish an aging power grid." New, schmew; those raw materials costs are soaring. "The price of coal, which fires half of U.S. power plants, has doubled since last year, largely because of surging energy use in countries such as China and India. Natural gas prices are up nearly 50% on high U.S. demand. In California, drought has forced Pacific Gas & Electric to replace cheap hydroelectric power with natural gas, helping to prompt it to seek 13% rate increases." And you know that "let's build nukes for our plug-ins" idea? "South Carolina Electric & Gas wants to boost rates 37% by 2019 to cover its share of two nuclear reactors costing $10 billion." And Americans who believe that global warming is a threat are going to have to put their money where their mouth is. "Expect bigger rate shocks if federal legislation, anticipated by 2010, passes and forces coal-fired generators to pay fees to emit global-warming gases. American Electric Power, the largest coal-fired generator, will have to raise rates 115% to pay higher fuel costs, build new plants and recover global-warming fees." Bottom line: ICE, PHEV, EV– there is no such thing as a free ride.

Robert Farago

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Geeber on Jun 17, 2008
ttacgreg:Furthermore, anyone who argues their point of view with others who disagree with them by creative and derisive name calling and labeling, is intellectually challenged, is is making no real substantive rational and logical argument. I'm assuming that this condemnation includes carlos.negros, as he wrote this for the very first post on this thread: And expect even bigger rate shocks if we get another Repugant in the WH. That certainly sounds like name-calling to me, and I sure don't see much in the way of substantive or logical argument in that post. ttacgreg: ...and yes the potential for dramatically scaled disasters (Chernbyl, anyone?) Chernobyl used a different design than virtually all western reactors. What happened to Chernobyl in the old Soviet Union isn't applicable to better-designed, safer western reactors. That's like saying that all cars built in the early 1960s are dangerous, because of the handling problems with the old VW Beetle and first-generation Chevrolet Corvair. Never mind that other cars used completely different rear-suspension designs. carlos.negros: I predict Americans will learn to enjoy smaller homes and city living again. I'm trying to figure out exactly when Americans did enjoy city living...the city has never been the ideal for Americans, even before the age of mass suburbia. For that matter, the trend for urban residents - beginning with ancient Rome - has been for those with money and means to move away from the city whenever possible. That is why the goal of every successful Roman was a country villa, and why London grew rapidly throughout the 18th and 19th centuries, and why wealthy Britons owned country estates. For that matter, every New Yorker I know who enthusiastically talks up the joys of living in Manhattan also has a country house in upstate New York or rural eastern Pennsylvania. I'm sure we'd all tolerate urban living if we had a house in the country, too...

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Geeber on Jun 17, 2008
jurisb: What a coincidence. what does supply has to do with costs of energy?Nothing! If you want to buy 3 muffins from me or 6 , how does it affect costs of ingredients if I can make only those 3 muffins? If you can only make three muffins, but there is a demand for six, you can raise the price of the three muffins. Why? Demand outstrips supply. The higher price means that YOU can afford to pay for more inputs (which would include the ingredients for the muffins, the energy necessary to bake them, and the labor you expend to make them). If you can make three muffins, and there is only demand for one muffin, you need to discount the muffins. Because you are either just breaking even, or taking a loss, you will therefore scale back production, and use a smaller amount of ingredients, labor and energy making muffins. Because you are using fewer amounts of the ingredients, you will depress demand, which, in turn, will depress their price. jurisb: it is all about greed and milking. In my greed obsessed little republic they also raised prices for energy. But they raised prices for natural gas and electricity simultaneously for 90%. Why? Imagine if they raised prices just for natural gas. What do people do with natural gas? Right, heat their homes. So if the price of gas is doubled, people naturally would try to save by switching to electrical heating. here we go. So they immediately increase prices for electricity as well. So they can milk you both ways! Trim that little sheeple. Are the natural gas and electricity suppliers government-owned, or a government-sanctioned monopoly? If so, what you've described is hardly a failure of the marketplace, or capitalism. Your scenario involves government working to protect a source of revenue (and, in the case of a government-approved monopoly, trying to protect a cash cow that also provides jobs to residents). jurisb: US is by far the biggest manufacturer and consumer as well of electricity in the world. Unfortunately you do it because of greed and falling parity of your dollar, while the rest of the world will follow using your price increase as a reason( motivator) to increase even more “according to world energy price increase“. No, we consume electricity because our system can produce it relatively effectively (read - inexpensively), without too much pollution. And if you think that the electric markets in the U.S. (most of which are regulated at the STATE level, by the way) represent free-wheeling capitalism, guess again. Even with the deregulation movement in several states, electric utilities are still heavily regulated. It is usually state governments, however, that are most involved in the area of setting rates. jurisb: Capitalism, unfortunately, brings out in people the most inhumane and ugly insticts. Sorry, but as I've explained, the electric utility industry in the United States is hardly a bastion of unfettered capitalism.

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Areitu on Jun 17, 2008
# Phil Ressler : June 16th, 2008 at 10:36 pm Too much pessimism and not enough creative problem-solving. Don't forget about the status quo. I live in a desert community in California and I've seen some of my friends' electric bills hit $400-500 easily during the summer because they use the AC constantly. Solar, along with judicious use of skylights and evaporative coolers would reduce the energy demand.

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Ricky Spanish on Jun 18, 2008

nukes ftw

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