Washington Examiner energy reporter Callie Patteson led a panel with industry experts on Feb. 25, where she moderated discussions on affordability and energy prices.
Gabel Associate Co-CEO Mike Borgatti, Amazon Head of Energy Policy Nate Hill, Advance Energy United Managing Director Dylan Reed, and CTC Global Senior Manager Paige Rodrigues were on the panel.
Patteson questioned the panel on how they explain to consumers that spending more now on building out a grid will help them save more money later when energy prices are already high.
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“The way we look at reliability and affordability is it’s two different sides of the same coin,” Rodrigues said. “When you see prices for electricity rise, that means the cost of getting electricity where it needs to go and generating that electricity has increased, so a large contributor to the increase in electricity prices is transmission congestion.”
When the electric grid is unable to provide power from cheap energy sources to consumers as transmission lines reach maximum capacity, a phenomenon known as transmission congestion, grid operators have to use more expensive, local generation. This leads to higher electricity prices for consumers, according to Advanced Energy United.
Rodrigues used the example of transmission congestion to explain that building out the grid can help prevent price increases from this long-term.
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Reed explained that there is a cost to having reliable electricity.
“You want your electricity to be reliable, and there is a cost when that goes out,” Reed said. “If we aren’t making the investments in the grid to solve those issues, we do have to put forward money to invest in the grid, yes, but there is a cost if we don’t have that reliability that is very real towards economic growth, as well as just good quality of life issues.”
“I don’t want teachers having to sleep in their cars in the middle of January just to not freeze to death,” Reed added.
Borgatti said that electric prices are affected by the cost of natural gas.
“So why were electric prices so expensive last January? Because gas was extraordinarily expensive last January,” Borgatti said. “So we started thinking about how are you going to attack affordability here? Diversifying your resource mix really does start to matter.”
“Because if you’re only going to lean on one fuel source naturally, the laws of supply and demand work the way they work and are going to cause an increase in those prices,” he continued.
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Hill agreed with his fellow panelists and provided examples showcasing that companies are freezing their rates in response to the loads on the power grid becoming too much.
“We have to acknowledge people do feel like their rates are going up, and they are going up fundamentally, but these are also the tools that we have in the toolbox to spread the cost out and help freeze and lower rates over time,” Hill said.
