Coal power, and its slew of resulting externalities, should be a burden that all Americans begin to shoulder equally and directly in order for us to collectively address the problem. Virtually all Americans contribute to the country’s net power consumption and measures are available to all of us that allow for using less energy and getting more out of what we draw from the grid. An intervention to change our energy infrastructure should encourage energy savings, provide financial benefits for efficiency and spread the onus of power-related pollution amongst all Americans.
Fossil fuel companies routinely position themselves as a “necessity” to today’s power grid—that despite the short comings of their use, they provides a portion of our electricity that cannot be quickly and easily replaced. For the moment, if we agreed that is true then the 115 million American households all share some of the requirement for this dirty energy source as well as the responsibility for the environmental transgressions that it creates. Why not divvy it up?
Electricity generated from coal power plants is a finite, quantifiable commodity currently accounting for roughly 48% of our electricity generation. Taking the annual consumption of the average American home, a benchmark could be created that sets a level for how much dirty energy one household should be allowed to consume—a level that could be applied to everyone. Up to that level, ratepayers would owe the normal power rate charged by utilities. Above this point, any “excess” energy needed to be purchased would have to be clean and paid for at the relevant premium. The extra revenue would be directed specifically towards the research and expansion of new clean energy sources. Adding a warning label to power bills could also help spur the transition over the cleaner energy sources.
The brunt of this could be fostered by those who are able to weather the change in rates. According to the Department of Energy, households with an income over $100,000 a year use anywhere from 73% to 86% more power than households below the poverty line for a family of four. Given that low-income households tend to use below-average amounts of electricity, their monthly expenditures would not likely change.
Change the Playing Field to Change the Marketplace
A standardized level of allowable dirty energy consumption heightens the financial benefit of conservation, home efficiency upgrades and on site renewable generation, bringing them all directly to the consumer. Not only would this encourage the renovation of our utility grid, but raise the energy standard of our residential building stock as well. Retooling our construction industry into a renovation and de-construction industry is one of the best ways we can address energy consumption in the country. Looking at homes, those built before 1950 use an average of 74,500 Btu’s per square foot and comprise 24% of our residential energy consumption according to the Department of Energy. Conversely, those built today average 58,700 Btu’s per square foot—an improvement of 21%.
Making power more expensive for those that draw the most could help tip the scales for energy saving technologies in more homes. The D.O.E. claims that the 45% of the energy consumption in the average American household is for space heating. While many people use heating oil or propane for heating, electric heat is not rare and often used as a supplement. Getting below the bar for fossil fuel energy could make geothermal heating and cooling more worthwhile. A net zero home, like this year’s Solar Decathlon winner, could carry even more net savings to homeowners.
Setting Government Environmental Standards
The Cap-and-Trade system was proposed as a method of rebalancing the value proposition of the country’s power generation industry in the direction of waning us from our dependence of fossil fuels and lowering our production of carbon dioxide. However, cap and trade had its day on the hill and failed to win the hearts and minds of enough of Congress while the country was knee deep in a recession. Part of what contributed to the coarse reception to cap-and-trade was that it was viewed by many as a tax levied on carbon. Conversely, this proposal is not a tax, but an pollution standard set on our nation’s power consumption.
Feed-in Tariff? Not exactly. These are used in some countries as a stable premium given to renewable power producers that covers the added cost of power that is more expensive than fossil fuel sources. The difference here is that the power premium is a blanket measure added at the distribution level to all power that leaves the facility and is applied to all ratepayers equally. While affixing premiums to the consumers that use the most power may result in the same amounts of money going to the same places, it turns paying for green power into a user fee rather than a blanket tax. Like tolls for roads and bridges, the people that pay the most are those that use the infrastructure the most.
CAFE standards for cars represent a government pegged limit for emissions that new automobiles must successively meet in order to be sold in the U.S. The result is a mandated progress in societal efficiency that pushes innovation beyond the speed of market forces alone. CAFE standards, however, are imposed at the producer level and are not retroactive which means they only affect a portion of overall cars on the road.
A per capita allocation of electricity from a given source is much closer to pay-as-you go trash removal. There are numerous municipalities in the country that weigh their own ability to pick up and dispose of a certain amount of trash relative to their residents. As a result, each household is allowed a given number of bags of trash per week (trash can only be picked up in bags from the town). Exceeding this amount is certainly allowed, but it means the owners need to go buy more bags. The practice encourages recycling, composting and conservation while trying to ensure that the available infrastructure is responding to all its residents with a certain degree of equality.
Photo Credit: webecoist.com