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Electricity's price is up. Just ask Mr. Rogers

An abnormally high electric bill jolted me into calling Progress Energy Florida to schedule an energy audit. Turns out my duct work needed repairs that the power company's program partially covered. That's enough, I hope, to put a dent in my air conditioning bill.

A Bright House Networks technician who recently came over to check my phone line casually pointed out I'd save power if I turned off my cable TV box when nobody was watching a show.

Making my household more energy efficient and my own power habits less spendthrift, it turns out, are part of a bigger trend. Slowly but surely, per-household electricity demand in this country is going to decrease.

"No one sees it now. But I think the new appliance standards and new technologies are going to have a dampening impact, more than experts say, on the demand for electricity in the future. I think this is one of those things that, 10 years from now, we'll look back and say 'Oh my goodness' and see that we have dramatically reduced the demand per capita."

That comment comes from James Rogers, CEO of Duke Energy, the power company that's about to complete its purchase of Progress Energy to create the biggest electric utility in the United States. Rogers offered that insight in a recent interview with the Washington Post.

Over the next 10 years, demand should decline by 0.5 percent a year, says the Electric Power Research Institute. In contrast, from 1980 to 2000, residential power demand grew 2.5 percent a year. Since 2000, growth has slowed to 2 percent.

Electricity demand is slowing for many reasons, from more efficient light bulbs to subsidized energy audits for homes like mine. New homes, of course, use far less energy than my drafty 1924 house.

Don't forget the impact of this searing recession. To save a few bucks, households are easing up on the A/C and trimming energy habits.

But there's another big reason energy consumption will continue to fall.

The price tag for electricity is only heading one way. Up.

"I think it's inevitable," Rogers told the Post. "The real price of electricity is going to rise over the next two or three decades to reflect the fact that the real price today is the same as it was 50 years ago."

Rogers, a utility executive for 22 years, cites one big cost: Replacing or cleaning up the nation's many coal-fired power plants. He is also a fan of building more nuclear power plants. A nuke plant envisioned by Progress Energy Florida in Levy County would start some time in 2021 at the earliest.

While that plant will be owned by Duke, should it ever be built, much of it will be prepaid by Progress Energy Florida customers now and in the coming years with explicit, escalating monthly fees.

I wonder: If electricity rates are going to soar "over the next two or three decades," at what point will other sources of power – perhaps solar, perhaps wind, perhaps something we have not even considered yet – suddenly start to look mainstream? Or, dare I even say it, cheaper?

Contact Robert

Electricity's price is up. Just ask Mr. Rogers 09/12/11 [Last modified: Tuesday, September 13, 2011 9:50am]
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