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September 2008
Why the cost to produce electricity is rising
GreyStone Power, an electric membership cooperative serving 101,000 members west of Atlanta, historically has some of the lowest electric rates in Georgia and the nation. Maintaining the best possible service at the lowest possible cost is GreyStone’s number one priority. But due to many factors, keeping rates low is proving to be a daunting task.
Like all electric utilities, GreyStone has no control over the market price of fuels needed to generate electricity, and those costs are steadily rising. A tremendous increase in world energy demand, rising coal shipping costs, the uncertainty in the Middle East and reaction to climate change issues have significantly contributed to the increasing cost of energy.
In addition, industry experts report that Americans are currently on track to double their demand for electricity every two decades. This increased demand is putting enormous upward pressure on the price of electricity, and U.S. demand is not the only factor. Many developing nations are using more electricity to grow their own economies, and their increased consumption of fuels such as coal and natural gas is increasing the cost of producing and delivering electricity.
“Unfortunately, energy costs are rising for all of us,” said Gary Miller, President/CEO of GreyStone Power. “Natural gas prices remain at higher than average levels. Fuel delivery costs are much higher today than just a few years ago. Due to environmental concerns, American utilities are producing more electricity with natural gas, which has steadily increased in price due to demand.
“It appears that due to political, environmental and fuel cost volatility, an increase in wholesale power costs is inevitable, translating into higher electric bills. When one adds climate change concerns and the cost of clean air standards to the rising price for traditional fuel sources, it is not surprising that costs are rising. Political actions on the horizon by Congress are expected to impact the cost for energy as legislators debate and take action on climate change. This is why we encourage people to contact their legislators about their energy concerns by visiting www.ourenergy.coop. We must start the dialogue with our legislators about the critical issues ahead for the electric industry,” said Miller.
As one of the first co-ops in Georgia to fund and deliver renewable energy through Green Power EMC, GreyStone continues to work hard to support the research and development of renewable energy alternatives in partnership with other Georgia co-ops. However, renewable energy, generated from solar, wind and biomass, in most cases costs twice as much to produce as energy from traditional sources.
According to the Wall Street Journal in 2007, the average cost per kilowatt-hour for coal is 5.31 cents, while the average cost for solar is between 26 and 35 cents. And it must be considered that renewable resources are not as reliable due to generation of many of those resources depending on weather conditions like wind and sun.
“It is GreyStone’s intent to be proactive and good stewards of our resources,” said Miller. “We are all reminded every time we pull into a gas station or buy a gallon of milk how the world economy is changing. But there is strength in numbers and as electric consumers, we must work together to find the solutions to the challenges ahead.”
GreyStone Power is a member-owned cooperative providing electricity and related services to 101,000 members in Douglas, Paulding, Cobb, Fulton, Coweta, Fayette, Carroll, and Bartow counties.
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