Think Your Electric Bill Was High? Here’s What’s Coming
By David T. Stevenson
Center for Energy & Environmental Policy
Feb. 14, 2025
Sorry about those high electric bills, but nothing has really changed in the last few months except the weather. Higher costs have been sneaking up for decades, and wait until you see what's coming next. Those bills didn't just get high overnight.
In 2008, legislation was passed that, along with more recent amendments, mandates increasing requirements for wind and solar power, and creates a carbon tax on in-state power plants. Thanks to efforts by the Caesar Rodney Institute, these costs are itemized on your electric bills if you are a Delmarva Power customer, making it easier to see exactly where your money is going. These line items include:
- Green Energy Fund
- Qualified Fuel Cells
- Renewable Power Compliance Charge
- Energy Efficiency Charge
Add them up, and they account for about 10 percent of your electric bill, or about $170 a year on the average bill.
NOTE: These itemized charges will continue creeping up and could double even without a mandate for offshore wind power. If Delmarva is forced to buy offshore wind power, your electric bill could rise by an additional $200 a year on average over the next twenty years.
The Hidden Costs of Carbon Taxes
Because Delmarva buys power on long-term contracts, you can't see the carbon tax cost.
To understand how carbon taxes affect electric bills, consider what happened in Virginia. Virginia joined the Regional Greenhouse Gas Initiative (RGGI), a multi-state carbon cap-and-trade program to reduce greenhouse gas emissions from power plants.
As a result, the cost of carbon allowances was reflected directly on consumer electric bills, initially adding about $75 a year. Since then, the cost of these allowances has increased nearly threefold, but fortunately for Virginia electric customers, Virginia Governor Youngkin pulled out of RGGI.
This example highlights how carbon pricing policies can significantly raise electricity costs over time. Altogether, these charges could increase your green energy bill to $600 a year just for wind, solar and carbon taxes.
New Energy Policies That Impact Your Wallet
However, there's more. Delaware's Climate Action Plan includes:
- Forcing all home heating and hot water systems to be fueled by electricity, which costs more than propane or natural gas.
- Enforcing an existing mandate that will eventually require you to drive an electric vehicle, which you'll likely charge at home.
- Increasing demand for electricity, which will have to be met with unreliable wind and solar power.
- Ordering a study this year to consider mandating backup storage batteries, potentially costing hundreds of millions or billions of dollars.
- Investing billions of dollars in new infrastructure, as utility-scale wind and solar projects are usually located far from existing power transmission and distribution lines.
Delaware's Climate Action Plan proposes these costly policies. Experiences from other states show the potential financial impact if such measures are implemented. For example, a recent study completed for the New England states suggested a similar plan could double electric rates. The average Delaware residential electric bill is about $1,680 a year now. Ready to pay $1,680 more? Perhaps these recent high electric bills will wake people up to the slow boil before they get cooked.
In future elections, make sure you know what energy policies your candidates support. We can have clean, reliable and affordable power for a lot less than these so-called green policies.