Your monthly electric bill is a complicated business that depends on where you live.
“The biggest driver of increases in electricity rates in California -- the costs associated with mitigating the risk of wildfires.”
Ryan Hledek is consultant with the Brattle Group, which studies complex economic, regulatory and financial questions. In Virginia, he says, other forces are at play.
“The distribution system is basically what takes electricity from the very large substations that you might see when you’re driving down the highway, all the way down to your home. Portions of that system are now 80 years old, and big investments are needing to be made," Hledek explains. "We’re unfortunately needing to do that a time when the cost of that equipment has gotten more expensive.”
Then there’s a question of what fuel is used to produce electricity.
“Where the power generation fleet is very dependent on natural gas, you see those parts of the country being very exposed to changes in natural gas prices, and that translating into changes in customers’ electricity rates.”
But Hledek sees cause for hope. Dominion is building the largest offshore wind farm in the nation.
“Wind and solar have become very cost competitive.”
Of course here in Virginia, the need to supply data centers is a driver, so lawmakers are talking about requiring data centers to pay the cost of new energy production, and some large operators of data centers – like Google – are exploring a new idea – being flexible when they consume power and paying other customers to reduce consumption during hours of peak demand.
