Price of renewable energy remains barrier to development

While many politicians, environmentalists and consumers continue to express a desire for more renewable energy, more projects are being canceled as governments try to avoid increasing electricity bills. "Deals to buy renewable power have been scuttled or slowed in states including Florida, Idaho and Kentucky as well as Virginia," Matthew L. Wald and Tom Zeller Jr. of The New York Times report. "By the end of the third quarter, year-to-date installations of new wind power dropped 72 percent from 2009 levels, according to the American Wind Energy Association, a trade group."

"They have to look for the ratepayers’ long-term interest," Michael Polsky of renewable energy company Invenergy told the reporters, "not just the bills this year." Invenergy recently had a deal to sell power to a utility in Virginia rejected after regulators concluded, "the ratepayers of Virginia must be protected from costs for renewable energy that are unreasonably high." Renewable energy sources, which already cost more than fossil fuels, have been hurt as the price of coal and natural gas has dropped during the recession.

"The gap in price can pit regulators, who see their job as protecting consumers from unreasonable rates, against renewable energy developers and utility companies, many of which are willing to pay higher prices now to ensure a broader energy portfolio in the future," Wald and Zeller write. In Kentucky, the state public service commission rejected a contract for Kentucky Power to buy electricity from NextEra Energy Resources. The deal was opposed by state Democratic Attorney General Jack Conway, who recently lost his bid for Kentucky's senate seat, and business and industrial electricity users.
"One of the problems in the United States is that we haven’t been willing to confront the tough questions," Paul Gipe, who sits on the steering committee of the Alliance for Renewable Energy, a group advocating energy policy reform, told the reporters. "We have to ask ourselves, 'Do we really want renewables?'" he said. "And if the answer to that is yes, then we’re going to have to pay for them." (Read more)