My posting of 26 Nov. 2013 on preferential electric rates for industry did not address the question of which industries are heavily sensitive to electric rates. A 209 report from the Pew Center on Climate Change* identifies the industries where costs are heavily reliant on electricity. Electricity costs more than about five percent for about ten percent of industries. For about two-thirds of industries the cost is two percent, or less. The Pew report provides a guide to which industries really need electric-rate relief.
* J.E. Aldy & W.A. Pizer, “The Competitiveness Impacts of Carbon mitigation Policies”, May 2009
The levelized cost of electricity, annually reported by the Energy Information Administration (EIA) , is often regarded as providing the best estimate of the true cost of generating electricity using wind power . Until recently there has been no good independent check of the EIA value.
The Michigan Public Utilities Commission has tracked the cost of wind-generated electricity in that state and has reported costs very different from EIA in recent years [2, 3]. There is a simple reason for the difference – the Michigan costs are real, while the EIA costs are predictions five years in advance (i.e., the 2013 cost is an estimate for 2018). Clearly EIA has not included in its estimates the drastic cost reductions of wind energy that have occurred.
Year MI-PUC EIA
2009 113 140
2010 84 110
2011 61-64 97
2012 52-53 96
2013 50-60 87
Table 1. Costs of Generating Electricity from Wind
(data from Refs.  – )
- EIA– Annual Energy Outlook
- Michigan Public Service Commission “Readying Michigan to Make Good Energy Decisions”, 2014
- Michigan Public Service Commission, Report on the implementation of the P.A.295 renewable energy standard and the cost-effectiveness of the energy standards, issued annually