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Marvelous Electricity! Ah, but the Cost!

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Marvelous electricity! Just flip a switch and on come the lights, up goes the garage door, news and email stream into our homes, water is hot, and our food cooks. Electricity is everywhere and does most everything. Most of us don’t think about electricity as we discover more and more uses for it. But, inquiring minds want to know the cost!

Before we can answer that question, we must first know how much we use.

This question is fairly easy to answer. Get a two year summary of your electric usage from your provider. Total up each year. Are the totals about the same? If so, you can be fairly comfortable by using the average of the last two years, as your approximate annual usage. If the year totals are significantly different, ask yourself why. Were you away from home for an extended period? Did you do some major project that required electricity? Have you added (new lighting, new big-screen TV) or eliminated or improved some significant appliance – maybe the refrigerator or clothes washer? Make some estimates and come up with your best guess for the time being.

OK, now what is the cost? Well the easy cost to calculate is the short-term financial cost. Simply look at a representative bill and divide the dollars you paid by the total kWh consumed that month – it should be something around 16½ cents per kWh in our region (the state average was 17.5 cents per kWh in 2009, close to the most expensive in the country, according to the EIA – US Energy Information Agency). Next multiply the annual kWh times your cost per kWh. If you are the “average” New Yorker (according to EIA) you use 6,972 kWh a year and it costs you about $1,150. Now, you will have to agree that was a lot of work, entertainment, cold & hot food and light for the money.

BUT… this is only one of the costs, the economic cost. There are also environmental costs and energy costs. Let’s take a closer look at these.

When you turn on a light in Claverack or Voorheesville or downtown East Hebron the power is made elsewhere. Where? This varies; you can’t back-track an electron that feeds your mixer to its source, but each of the Utilities (National Grid, NYSEG) provides weighted source information to the Public Service Commission. Eventually you get an Environmental Disclosure Label. These labels show the source of the fuel mix that went into their power generation, and thus it also shows how much Carbon Dioxide (CO2), Sulfur Dioxide (SO2) and Nitrous Oxides (NOx) were emitted in the production.

On the whole, New York State is pretty good regarding pollution in electric power production. First, we have a large hydroelectric component with on average 26% of our power being generated by hydro versus the national average of just 6%. Second, we use less coal, about 23% versus the national average of 49%. But still, when you turn on a light or the TV or the electric range you are responsible for producing electricity that emits pollutants. Each kWh of power we use produces 0.68 pounds of CO2, 0.0024 pounds of SO2, and 0.00072 pounds of NOx. These amounts may not sound like much but when you multiply these numbers by all the kWhs you use (say 6,972 x 0.68 lbs CO2 = 4,741 lbs) and then by what all your neighbors use it becomes a staggering amount. This cost is paid in health care, lost productivity, shortened lives and sorrow.

The third cost of electricity is the energy cost of producing and distributing the electricity. To be comprehensive, to be fair, we should consider all the energy in producing and delivering electricity; after all, we include all the costs when we price electricity. We should include the energy to: create the steel and build the plants and the power grid; move the fuel (coal, natural gas or nuclear) to the plants; produce the electricity we use; maintain the grid and the local distribution network; build the offices and the garages of the local utility company; and finally, read the meters, prepare the bills and collect the fees. This would be an analysis similar to what Dr. Pimentel has done for our agri-business, supermarket-distributed food in calculating all of its energy costs. To my knowledge there has not yet been such a study for electricity (if you know of one, please let me know).

So today we are going to use as the energy cost “just” the energy to produce and distribute electricity in our national grid system. You may find this information, provided by the EIA, shocking if you haven’t seen the numbers before. I surely did the first time I saw the numbers. When I think of a product made in a factory, I think it is done more efficiently than I could make the same product at home. But, the sad fact is electric production is very inefficient and these efficiencies have not improved significantly in 20 years or more. Here are the numbers: It takes about 10,400 BTUs from coal, petroleum or uranium to send 1 kWh (=3412 BTU) of electricity away from the plant. It takes about 8,200 BTUs of natural gas to do the same thing. Efficiency = Energy Out / Energy In (coal, petroleum or uranium 3,412/10,400=33% efficient, natural gas 3,412/8,200=42% efficient). I had a hard time typing “efficient” when I wanted to type “inefficient.” While moving electricity through the grid another 6% of the electricity is lost! This results in energy efficiencies of 27% to 36%.

I do not yet have an efficiency number for hydro-electric. Again, if you know of a good computation and source for data, please comment. I expect the hydro equation is considerably different – you have to build a dam, for example! Another fact about hydro is we are very near our U.S. capacity – all the good spots have been taken. So, we will let this detail slide for now.

The point is, how we generate and distribute the bulk of our electricity is part of The Problem.  The power-station, grid-distributed electric system is very inefficient and expensive. With the energy required to produce electricity becoming more expensive and less available, we must rethink many aspects of how we generate, distribute and use electricity. As individuals we need to understand the full cost of electricity from the “plug” and we need to look for greater efficiencies in the home as well as conserve where we can. As communities we should be looking for more efficient ways to generate power, perhaps using co-generation. The forward thinking city of Hudson, NY conducted a feasibility study to build a plant to produce some of their electricity and heat – see Michael O’Hara’s blog. Finally, we should support renewable energy via the grid (future blog on this) and install renewable energy at home if we can – see RWSimon’s blog about how great an investment PV is today.

In summary, before we flip a switch, we should first consider the cost!

Dan Gibson is the Reporter and Chief Coordinator of Our Energy Independence Community ( Previously he was a participating contractor in NYSERDA’s Home Performance program and a rater in the New York ENERGY STAR Home program. He is currently building a 100% Solar Home. He can be reached at

Comments on "Marvelous Electricity! Ah, but the Cost!"

  1. OEIC default avatar EricS1962 November 09, 2011 at 12:13 pm

    Interesting article.  You don’t mention some costs.  Here are a couple.  Coal is dug out of the ground by guys who do a job I would never do.  The health costs to them personally are terrible: black lung disease, horrible working conditions, etc.  A lot of that cost is borne by the individual miner.  Planning and conduction of power lines is largely a political process.  For example, the NY State high voltage system is largely run at 345 kv.  The original design was for 765 kv, a more efficient voltage level.  Downgrading to 345 kv contributed to the severity of the last major power failure in the North East, by restricting the flow of electricity around the state.  And don’t get me started on the nuclear power plant built and never used because it was too near to NY city.  That was $6 billion out of the taxpayer pocket!  Can you say ouch?

  2. Dan Gibson's avatar Dan Gibson November 18, 2011 at 6:28 pm

    Thank you Eric for revealing even more insidious costs. Roof top PV is considered expensive because we know almost all the costs associated with it. When you start adding up the underlying, often public supported costs of the coal, oil and nuclear infrastructure and then divide by kWhs delivered these forms are not as “economical” as they are portrayed. Thank you for your comment.

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