Predicted Renewable-Energy Compliance Costs

Ohio’s renewable energy goals were frozen in 2014 at 2.5%. Unless the Legislature acts they will resume increasing annually in 2017 until they reach a maximum of 12.5% in ten years. There is debate on how much the increased goals will cost householders. Currently the renewable-energy rider on electric bills averages 57¢ per month (1). Extrapolating this charge from 2.5% to 12.5% results in a predicted cost of $2.85.

However it is reasonable to expect that the cost will be smaller. Four companies in the AEP zone currently offer both zero 100% renewable energy. Details are given in Table 1. The resulting premium ranges from nothing to $6 per month. Since the goal is 1/8 of a dollar, dividing the premiums by 8 gives predicted charges ranging up to 75¢/month (2).

Table 1. Cost Premium of Renewable Energy as of 15 November 2014

Company Terms Price, $/MWh Premium,

$/MWh

No

Renewables

100%

Renewables

AEP 24 Months Fixed $61.50 $67.50 $6
IGS Energy 12 Months fixed $58.90 $60.90 $2
Star Energy Partners 12 Months Fixed $61.90 $62.90 $1
24 Months Fixed $68.90 $69.90 $1
36 Months Fixed $71.90 $72.90 $2
Viridian Energy 12 Months Variable $59.10 $59.10 0

 

Notes

(1) Industrial Energy Users of Ohio website.

(2)  Ohio has 4.457 million households (U.S. Census Bureau Quick Facts http://quickfacts.census.gov/qfd/states/39000.html) in 2014 they consumed 52,722 million kWh of electricity (Electric Power Monthly, Feb. 2015). These numbers lead to an average usage of 960 kWh per month. One MWh = 1000 kWh is a close approximation.

 

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