The idea that I could choose my own electricity provider made me laugh when I first started getting those pitches trying to get me to convert to another supplier. The more I look at this today, the more I wonder if this isn’t a giant scam. I don’t often use hyperbole, but in this case, it may be apt.
To recap from my solar panel series, your electric bill is divided into 3 parts:
- Supplier Charges
- Distribution (or delivery) Charges
- Taxes and fees
In theory, you are choosing the supplier for your electricity and paying them a rate based on your sign-up agreement (which often comes with a low introductory rate and/or some incentive to switch, such as a gift card).
In fact, you are only choosing what your energy biller does with the money you send them – who they send the supplier portion of the proceeds to (for a fee I am sure).
You may think if you choose a 100% wind energy option that the electricity you consume comes 100% from wind.
You would be 97.37% wrong – if you live in my part of the country, anyway. At least for the year 2018 (a table further down in this article will show this).
In order to explain what I think is really happening, and what, if anything, you should do about this, I will need to use an analogy, explain some terminology, and conduct some thought experiments.
Ready?
The Analogy – how do you get your water?
Turn on any water or shower faucet or flush any toilet in your house and what happens? Water instantly starts flowing into the sink or shower, or after a few seconds into the toilet tank.
How does this happen? If you go camping and use a well at a campsite you may have to prime a pump. Not in your home though. The water flows instantly at the turn of the faucet.
Somewhere near you there is a water tower. It is a large reservoir of water high off the ground, probably higher than any floor in your house.
Large pipes come out of this tower and span out in all directions (we will assume this tower is central to all of its customers for simplicity). As the pipes get closer to specific neighborhoods or business districts the pipes probably get smaller and split off again. A smaller pipe runs beneath your street. A smaller pipe connects through a water meter, under your yard, into your house. From there pipes run to each cold water faucet and toilet. One branch of the piping runs to the hot water tank (or tankless system) and then connects to all the hot water faucets.
At any point in time the system is under pressure from the water tower all the way to each of your faucets and toilet tanks.
Unless of course they have posted those signs warning of ‘flushing of mains’. In this case when you turn on the faucet, you hear spurts and sputters and air.
That exceptional time aside, there is an unbroken connection of water from the tower to you, making this instantaneous draw of water possible.
Thought Experiment #1
Suppose the water tower gets its water from 3 suppliers. Suppose also that you are allowed to choose your own supplier.
Knowing that the water in the water tower tank is mixing in the water from its 3 suppliers, do you really think there is any way possible that the water you receive could come from just one of the three sources that you choose?
I hope you are not going to suggest that the water company build 3 separate output systems that run all the way from your tower to your house so you can choose which water you use!
As absurd as that is, let’s say they did. Now a 4th supplier shows up. Uh Oh. Now we have to build a fourth set of pipes to your house so you can ‘choose your supplier’.
So it goes with electricity. There is a regional ‘highway’ that suppliers feed electricity into. The highway distributes electricity to substations (akin to our local water towers), which in turn electrify the local lines leading to our homes. You see this highway as the high-voltage power lines that sit above tall towers.
In the Mid-Atlantic area (roughly) the owner of this highway is called PJM. It is named for the three original states it was originally designed to distribute electricity in: Pennsylvania, New Jersey, and Maryland.
PJM supplies your local electric utility, which in turn has the responsibility to monitor the local grid to ensure that your electric outlets (and everyone else’s of course) will produce electricity when you plug something in or turn something on, much as your local water utility keeps water running to your faucets.
PJM has grown to include other states. Per their web site:
PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.Â
So if you are a power producer in this region, you file the appropriate paperwork, pay the appropriate fees, conduct the required engineering studies, and upon acceptance, PJM installs the proper equipment to connect your power to this highway (aka, the ‘grid’).
The point is that your electricity comes from this highway, and all of its sources. So what do these sources look like? Each of these companies files a report in the state of Maryland to explain what the sources of electricity are in this state. They all look remarkably similar (there are minor differences due to the exact date range of the report). This is because, in fact (in the fine print) they are all getting this information from PJM. Here is what the report looks like (just picking one example, but they are all similar to this):
In this specific example, about 94% of Maryland customer’s electricity comes from Nuclear, Natural Gas and Coal. Less that 3% comes from wind, 1.5% comes from Hydroelectric, and just over 1% comes from all other renewables.
The point is that the table above seems to only change a small amount year to year. So you may pick a ‘provider’ that advertises that it is a wind or solar producer. The supply portion of your bill will be funneled to them through your local electric utility. That may provide them with the revenue they need to stay in business and even expand. All of this may be a good thing. I am not trying to discourage anyone from picking one of these suppliers. But if you do, please, do not make the claim that your energy is provided by a wind or solar company.
This is simply NOT the case.
Thought experiment #2
You campaign vigorously and get everyone in Maryland to choose the same wind farm as their supplier. Does anyone believe for a moment that the nuclear, natural gas, and coal plants would all simply shut down so that this wind farm can supply 100% of the electricity in Maryland?
This is not technologically possible today. First, the wind farm would have to be huge, large enough to supply all of Maryland’s needs. Second, the wind is not always blowing where the wind farm is located, so the wind farm would have to invest in a storage system large enough to provide the state’s customers with energy 7*24*365. There are stories about this happening in Australia and California to a limited extent, but as of this writing it is a very expensive investment.
In the unlikely event this happened, the nuclear, coal, and natural gas plants might still not shut down. PJM would still allow their power to feed the grid, as it is supplying energy to the large region described above. As PJM’s highway system of high voltage lines runs near your local substation, these local plants are going to in practice still energize these nearby substations, as well as supplying energy to all of the states covered by this company.
So, keep up with the news, pick the supplier of your choice, and perhaps one day we will all be supplied by renewable energy most or all of the time. Understand though that this is a long journey.