Electric Rates and Voters Rising

Whether you own your own solar panels, or have a PPA (Power Purchase Agreement), one of the huge benefits of having solar is the absence of ongoing supply rate increases.

Case in point would be our local electricity price increases around the Pittsburgh area. As reported by Anya Litvak in the Pittsburgh Post-Gazette, Pa. consumer bills going up as natural gas takes electricity along for the ride.
“Residential Duquesne Light customers will see supply charges — the part of their rate that’s tied to the cost of fuel — increase by about 7.7%. West Penn Power customers will see a 4.5% increase in that rate, also known as the price to compare. A utility’s price to compare is just one portion of the total bill, typically between 40% and 60%, according to the Pennsylvania Public Utility Commission. Other costs include the distribution charge, which funds the utility’s maintenance of its infrastructure, and surcharges like those used to fund capital improvements.”

Cheap gas?
Just because we have the Marcellus Shale gas formation a mile beneath our feet, with tens of thousands new gas wells to be drilled over the coming decades, that doesn’t mean locals will have a lifetime of cheap natural gas. Reporter Anya Litvak goes on to explain why:

“The price of natural gas futures on the New York Mercantile Exchange — an indication of what buyers are paying for gas contracts for the next 12 months, is now around $4.25 per million British thermal units. It hasn’t been this high since 2014. This also means natural gas utility customers are seeing, and will continue to see, increases in their bills.”

Natural gas is like oil, it’s a global commodity subject to broad market fluctuations, and now that pipelines are in place to export fracked gas out of Pennsylvania in all directions, that homegrown energy can easily be sold to the highest bidder. The world’s great hunger for natural gas, in the form of LNG (Liquefied Natural Gas) has been clearly revealed by the rapidly increasing number of oceangoing LNG vessels and US export terminals.

So what’s in it for Pennsylvania, since oil and gas extraction is not a labor intensive industry, especially now that the infrastructure has been mostly been built out? Industry shills will point to the Pennsylvania Impact Fee, which on the surface may look like a lot of money, but is actually chump change compared to the Severance Tax other gas producing states collect from oil and gas extraction. It’s not fair to taxpayers to let gas products escape Pennsylvania without being taxed at the wellhead. After all, we’re running a close 2nd to Texas in U.S. natural gas production.

Yet the attitude in Harrisburg is to continue giving natural gas producers and royalty owners a ‘hall pass’ on a much needed severance tax, as they scramble to find revenue to balance state budgets. Even during the biggest booms of drilling and fracking activity over the past 15 years, we saw budget cuts that created an alarming and drastic decline in personnel at our much maligned Pennsylvania Department of Environmental Protection (DEP) at the exact time we needed far more environmental inspections and oversight. Extensive drilling violations have clearly indicated the need for more inspections, resulting in broader enforcements.

Over the next 50 years of ongoing drilling and fracking, especially with the start-up of the thirsty shale gas cracker plant in Beaver County in 2022, Pennsylvanians living in the gas patch require and deserve better environmental protection. A severance tax could rebuild a more viable DEP to help provide better oversight of this burgeoning industry.

In the story, Ever Heard Of Severance Tax? It’s How Texas Makes Money Off Oil And Gas Drilling, we see the Texas comptroller’s office expected the state to collect a combined $6.7 billion from oil and gas industry taxes in 2018-19. With Pennsylvania being the second largest gas producer in the United States, why would our state legislators leave that kind of budget-restoring money on the table?

With Pennsylvania producing nearly 80-percent of that same amount of gas, a similar impact fee would yield $5.36 billion per year. Yet the Impact Fee in Pennsylvania only yielded $146 million in 2020, which is less than 3-percent of that amount. Chump change! In fact, over the past 7 years, the Pa. Impact Fee has only paid out $1.39 billion in total, which is still only 26-percent of what it should be every year, if it were on the Texas scale. Talk about getting ripped-off!

For these and other reasons, Pennsylvania voters sorely need to vote out frac-friendly politicians at the state and local level. We need representatives who care more about the financial and physical health of Pennsylvania families, than the financial wealth of an already heavily subsidized oil and gas industry. Beyond that, it’s truly pitiful how these same politicos are trying to kill renewable energy like solar.

A future dependent on finite fossil fuels is no future at all.
Bob

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