Two Answers I’d Like on Xcel Energy’s Carbon Report
Xcel Energy made headlines by announcing they would be the first electric utility to derive 100 percent of their electricity from sources that don’t emit carbon dioxide by 2050. Earlier this month, the government-approved monopoly utility company released a 28-page report outlining their plan for “Building a Carbon-free Future.”
After reading the document, I was left with two nagging questions that should have been answered in the report: what would it cost, and how much future warming would it prevent?
I suspect these two data-points were omitted because achieving a carbon-free grid by 2050 would be massively expensive and environmentally inconsequential.
Such a disclosure would not bolster Xcel’s case to build, and more importantly profit from, building billions of dollars in wind turbines, solar panels, transmission lines, and other “carbon free” energy resources. However, Xcel Energy’s customers deserve to know the cost of going “carbon free,” and the reduction in future global temperatures it would achieve.
What would it cost?
Xcel’s Carbon Report mentions the word “affordable” 12 times, and the word “bill” is used 6 times, accompanied by “low” twice and “reasonable” once, but they never define what “low” or “reasonable” mean. What would this cost consumers? We don’t know.
In fact, the 28-page document contains only two dollar signs, once to state that Xcel’s annual revenues are $11.4 billion, and that customer bills across their service territory are $28 below the national average. The report makes no mention of the fact that bills are lower due to lower electricity consumption, not because of lower electricity rates.
Furthermore, one would think a company that has $11.4 billion in annual revenues would be able to put together a ballpark price forecast for their plans, but this information is absent.
So what will their plan cost? Based on our new report, Doubling Down on Failure, How a 50 Percent Renewable Energy Mandate Would Cost Minnesota $80.2 Billion, it would cost a lot.
In fact, achieving a power grid that was 79 percent “carbon free” by relying on wind, nuclear, and solar would cost Minnesota $80.2 billion through 2050, and going to 100 percent carbon free with wind, solar, and battery technology would cost exponentially more.
A price tag of $80.2 billion would increase energy costs by $1,200 per household in Minnesota, every single year until 2050. Such a measure would increase electricity prices by 40.2 percent, making it more difficult for Minnesota families, businesses, schools, hospitals, and job creators to pay their electricity bills. According to the economic modelling software IMPLAN, such large increases in electricity costs would destroy 20,950 jobs.
Our report also found achieving an electric grid that is 80 percent carbon free by 2050 using nuclear power would still be expensive, but it would be far more affordable than relying on wind and solar.
How much warming would it prevent?
The Carbon Report mentions the word “climate” 93 times “temperature(s)” 27 times, references the Paris Climate Agreement 23 times, even though this agreement was never ratified by the U.S. Senate and President Trump has announced the U.S. is leaving the agreement, and the word “degrees” is mentioned twice, but not once does the document say how much global warming Xcel Energy would avert with their carbon-free plan.
In Minnesota, a 100 percent carbon-free electric grid would reduce global temperatures by about 0.00073 degrees Celsius by 2100, an amount far too small to be measured by even the most scientific equipment. Furthermore, this figure was calculated using the assumptions used by the Obama Administration to craft the Clean Power Plan, widely considered to be the previous President’s signature climate change initiative.
Minnesotans deserve to know that going carbon free will impose massive costs on their families for no measurable reduction in future global temperatures. I sincerely doubt there would be many families who would be willing to incur a cost of $1,200 per year to avert just 0.00073 degrees C by 2100, but every Xcel Energy customer deserves to know that Xcel’s plan to go 100 percent carbon free will be a massive opportunity cost for their families.
Many people would wonder why Xcel would pursue this plan if it would have dire consequences for their customers and achieve no measureable environmental benefits, but this leads back to the way government-approved monopoly utilities make money. Utility companies are guaranteed to make a 7.5 percent profit on every dollar they spend on infrastructure, giving them a powerful incentive to build as many wind turbines, solar panels, and transmission lines as possible.
And because Xcel is a monopoly utility, customer’s cannot switch their service as their bills increase. They’re stuck footing a massive bill for minuscule reductions in temperatures. The people deserve to know the costs and benefits of Xcel’s decisions.