The Great Recession good for drop in U.S. energy consumption in 2009

Never let a crisis go to waste.  At least the United States wasted less energy last year, and significantly increased it's use of renewable energy sources (specifically wind energy).  Too bad it wasn't an enlightened response to a long overdue change in our consumer mentality, but I'll take an economy related behavioral change. 

How much did we reduce our overall energy consumption?  We went from 99.2 quadrillion BTUs in 2008 (British Thermal Units) to around 94.6 quadrillion BTUs in 2009.  That comes out to a drop of about 5%.  According to the article from CNN, "to put that in perspective, the average room air conditioner uses about 10,000 BTUs." 

It appears that the renewable energy incentives Democrats and the Obama Administration pushed for, are working.  This also means that with this reduction in energy consumption (primarily of fossil fuel use), it also means we emitted less carbon dioxide.  Positive steps, but still a long way to go in order to effectively address our lack of a national energy policy. 

Let's see how the public utilities and energy companies respond.  Maybe they'll hold the line on rate increases or reduce them?  Probably not.

Virginia SCC approves rate increase for Appalachian Power for 7.7%

Appalachian Power got their rate increase, just not the 13% they originally sought. According to news reports, the SCC approval will increase the average utility customer's monthly bill around $7.16 for 1,000 kilowatts of use. The rate increase will go to cover increases in fuel costs for Appalachian Power, who gets 98% of it's power from coal.

This isn't the last application for a rate increase. Appalachian Power has three more in the hopper. Keep in mind that AEP, Appalachian Power's parent company, reported a 2nd Quarter profit even though revenues were down.

Appalachain Power shows 2nd Quarter profit, still seeks rate increase

Rate increases and cost cutting in Virginia, Oklahoma, and Indiana helped boost the bottom line for Appalachian Power's parent company, AEP, by 12% according to an article in the Roanoke Times yesterday. But still, AEP wants another rate increase because "even though the SCC allowed the utility a return on common equity in its Virginia territory of 10.2% in calendar year 2008, the actual return was only 2%." Profits increased despite a drop in revenue.

In other words, they didn't make enough of a profit and they need the rate increase to make more than a 10.2% profit. What they didn't add is that they need the rate increase to help cover the cost of building the new Coal Fired Power Plant in Wise County. Also according to the article, Appalachian Power gets about 98% of its electricity from coal.

A couple of thoughts about this. First, AEP did things to cut cost and increase efficiency across the states they operate, which is a good thing. Second, just like all those conservatives out there that say increasing taxes during a recession is a bad idea, so is increasing utility rates. AEP's revenues were down, which means that their customers were cutting back because of the economy and were trying to conserve energy to put more money back in their own pockets. AEP's request for a rate increase is just like raising taxes on people that don't have the money to spend on more expensive energy. Third, Appalachian Power gets 98% of it's energy from coal. That's way too much. They need to diversify where they are getting their energy from. I know that the United States is the Saudi Arabia of Coal, but the less coal we use and the more clean energy or biomass energy sources (chicken and cow poop) we use, the more we will reduce our carbon footprint.

If this doesn't convince the SCC that Appalachian Power's request for a rate increase is not necessary, I don't know what will.

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