Consumers Already Pay for Electricity System Waste

The inadequacies of today’s electricity system affect all Americans. In addition to leaking energy and fuel, the system risks health and safety, is increasingly vulnerable to attack, and leads to lost productivity.

Here is how today’s electricity grid costs Americans trillions of dollars each year:

1. Inefficiency in generation and transmission: The plants that generate electricity and the lines that carry power to our cities and towns usually have to move a lot of electricity a long distance to the homes and businesses that use it. These large, centralized power plants were built using decades-old technology that is very inefficient, as they waste almost ⅔ of the fuel they consume.^1,2 In addition, power lines lose up to 10 percent of the power they transport through what is called “line loss.” As a result, roughly 75 percent of the resources consumed to supply electricity is wasted.
2. Unnecessary power outages: Most power lines in the U.S. are above-ground and frequently fall prey to weather, animals and accidents. When something happens to the line, the power goes out and consumers, businesses and utilities pay for the resulting repairs and economic losses. In extreme cases, electricity outages cause injuries and deaths, but more commonly produce flooded basements, spoiled food and lost work — costing consumers billions each year.³
3. Underutilized infrastructure: Utilities spend billions of dollars each year building more power plants, power lines and substations purely to handle periods of extreme cold or heat, when demand for power spikes and exceeds existing capacity. This infrastructure sits idle much of the time.⁴
4. Potential public health risks from power generation: Our electricity system is the top producer of manmade carbon dioxide, sulfur, mercury and other hazardous pollutants.⁴ When energy is wasted, the carbon dioxide resulting from its generation enters our atmosphere unnecessarily. These inefficiencies also hurt our economy, as health care costs increase due to the effects of pollution.

So we as consumers pay for all of the current waste in the electricity sector. We can continue paying for this waste, or we can pay for improvements that would eliminate it. Think of it as a one-time payment to the plumber to fix the leaky faucet that is driving up your water bill; if you do not pay to have it fixed now, you will be paying in drips until you do.

Table 1: Electricity System Waste

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^1. Energy Information Association. Annual Energy Outlook 2009, Tables A1-A20.

^2. Livermore, L. Energy, Carbon, and Water Flow Charts, National Labs
https://publicaffairs.llnl.gov/news/energy/archive.html#energy_archive

^3. Berkeley, L. Understanding the Cost of Power: interruptions to U.S. Electricity Consumers, National Labs, September 2004.

^4. 2008 State of the Market Report for PJM, Figure 2-4
http://www.pjm.com/media/documents/reports/state-of-market/2008/2008-som-pjm-volume2-sec2.ashx

^5. Galvin Electricity Initiative Perfect Power prototype design reports for the Illinois Institute of Technology and Mesa del Sol development, http://galvinpower.org/projects/perfect-power-illinois-institute-technology

^6. http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp

⁷ Consumptive Water User for U.S. Power Production, NREL/TP-550-33905, P. Torcellini, N. Long, and R. Judkoff, December 2003.