OPED: Everyone benefits from Independence Energy Connection
States in the Mid-Atlantic region, on average, spend nearly $233 more on electricity each year per household than the national average. In Maryland, the annual cost is $181.55, and in Pennsylvania, it is $159.03 higher than the national average, according to the Energy Information Administration.
And not surprisingly, high costs hit individuals with low incomes and families on a budget even harder.
Per the Bureau of Labor Statistics, the bottom fifth of U.S. households spent a budget-crushing 22 percent of their after-tax income on residential utility bills and gasoline in April 2016, and the non-profit renewable-energy advocacy group Groundswell says that the bottom 20 percent of earners spend nearly 10 percent of their income on electricity.
No wonder the U.S. Department of Health and Human Services reported in 2011 that about 23 million Americans required some sort of federal assistance to help pay for electricity or home heating.
Some of them might be your neighbors, friends or family. Per a Consumer Energy Alliance analysis, 1.85 million people living on food stamps live in Pennsylvania and another 722,200 or more reside in Maryland.
These cash-strapped families already are struggling to pay for necessities such as food, clothing and shelter without having to account for an over-the-top utility bill that could be much lower if there was more support for the expansion of the region’s energy infrastructure. That includes both pipeline and transmission line proposals such as the Independence Energy Connection.
That’s because even though there is an abundance of low-cost energy available, when there aren’t enough lines to move those supplies to areas of demand, it results in customers overpaying.
That’s where this project can help.
Just ask PJM Interconnection, the regional transmission operator that determines when high-voltage infrastructure upgrades or new projects are needed to ensure reliable and cost-efficient electricity. PJM doesn’t own or profit from transmission lines but selects projects with the most effective and economical solutions to benefit consumers in parts of 13 states, Maryland and Pennsylvania included. PJM projects a regional cost-savings of $622 million for consumers in the first 15 years the project is in service.
Load zones, which supply electricity to parts of Pennsylvania and Maryland, plus several other states, will benefit from the new access to low-cost electricity; however, the benefit is not isolated to these areas. Pennsylvania and Maryland enjoy a deregulated electric market where customers can choose an electric supplier by shopping and comparing rates. When low-cost supplies are introduced into the market and consumers can choose their rates, it drives competition among utility suppliers and cuts down on the price of electricity.
The additional costs of paying a premium for electricity, however, are not isolated to your utility bill.
Expensive electricity is essentially a regressive tax on goods and services. That means people with higher incomes pay the same amount as those with lower incomes for the same product or service. And as one of the top operating expenses for a business, these costs are added to the overall production cost and passed down to the consumer. For businesses, every dollar spent on energy is a dollar not spent on capital investments, higher wages and employee health care or hiring.
The impact can be felt across industries. This region, and particularly Pennsylvania, has a robust manufacturing base, and the cost of electricity plays a big-time role in the Commonwealth attracting and retaining those businesses and the jobs that come with them.
But the attitude toward infrastructure projects has shifted in recent years, taking on a more negative tone. Somewhere, support for the greater good of the economy, families and businesses changed. People have forgotten that our daily lives and our bank accounts all benefited from infrastructure development. It’s part of a larger disconnect that involves not just a lack of understanding but a lack of access to that energy.
Projects such as these dictate the market. They keep us moving forward, and they protect families and businesses, including those who need it most.
— Mike Butler is a Pennsylvania resident and the Mid-Atlantic Director for Consumer Energy Alliance (CEA).