The Oil Drum

The problem, as I see it, with the current program is that the vast majority of people have no economic interest in paying more for a good than is necessary. Why should they pay extra and give the rest of their fellow customers a free ride. In any event, the surcharge approach has clearly been shown to be a failure which I think back up my theory.

Under the "fixed price" approach, I assume that existing customers would face prices that go up and probably mostly down based on the future costs of wind. But once the fixed price of wind dips below that for all other sources, wouldn't most people rush in to change their payment plan. In that event, wouldn't you have to shut most people out of the program because of capacity constraints?

If wind becomes cheaper than the cost coming from the rest of the produced power, including coal, then the it would be in the utility's interest to switch to wind as much as possible without regard to any program that might be in effect. Under this scenario, all customers would benefit from lower overall prices.

Regardless, I think my particular utility needs to come up with a realistic goal for percentage of electricity generated by wind, figure out the cost to get them there, and then spread whatever additional costs are involved over all customers. I think that the vast majority of customers would not be sophisticated enough to choose wind with a fixed price, while projecting possible future benefits.

The goal, I think, should be to move to as much renewable energy as we can as fast as we can. We are running out of time.