This winter, Americans will see our energy bills rise by 30 percent on average due to skyrocketing natural gas costs. For the 4.8 million households already facing energy insecurity in the United States, this increase could be intolerable.
These costs are a signal of what’s to come if we do not reckon with the massive cost of continuing our dependence on fossil fuels. Making investments in cleaner energy sources that offer price stability is insurance for our future. Even more, a new analysis shows that the energy transition provisions in the latest Build Back Better framework will effectively and quickly reduce our electricity bills.
By significantly expanding incentives like tax credits and low-cost financing for clean energy, the Biden administration’s Build Back Better plan can accelerate a robust and economically viable energy transition. Now it’s on Congress to work with the President and get this plan over the finish line.
New RMI analysis shows that the Build Back Better policies, if fully utilized, could help the United States reach its clean electricity goals by 2030, while saving customers of utility companies $9 billion annually by the end of the decade.
We found that West Virginia ratepayers could save over $429 million each year if these proposals are enacted, while Arizona ratepayers could save over $450 million each year. And the faster utilities move toward clean energy, the more their customers would save compared to their current, fossil fuel-dependent plans of action.
Using publicly available data from RMI’s Utility Transition Hub and federal agencies, RMI calculated the effective “crossover” points at which adding more generation from renewable energy can save utility customers money relative to current utility operations. We also incorporated the costs of more capacity needed from battery storage and transmission for increased renewable energy usage.
In short, the savings presented in this analysis refute the myth — one that has garnered a great deal of airtime during the federal budget debate — that transforming our electricity sector will be too expensive for customers.
In reality, this country already faces a severe energy burden crisis, with the lowest-income American households paying a disproportionately high share of their income toward electricity costs. And with gas and coal prices skyrocketing, electricity is only getting more expensive. Electric utilities that choose to perpetuate the status quo of reliance on fossil fuels will not only fail to meet greenhouse gas-reduction goals, but they will leave our lowest-income households and communities to sacrifice comfort and safety as they struggle to pay for increasingly costly energy.
With the Build Back Better Act in place, electricity providers and their customers will benefit from direct-pay tax credits that make clean energy cheaper by enabling more utilities to use taxes that benefit renewable energy sources to the fullest. The provisions also offer credit flexibility for electricity providers to choose clean technologies that work best for their business, further enhancing savings. These are win-win proposals.
Across the country, a new climate reality is here. West Virginia faces historic flooding and Arizona has seen unprecedented drought and fire. Climate disasters add stress to our energy system and drive up prices for customers. Right now, the United States has the option to prevent these trends from worsening, while making energy more affordable.
We already know that renewable energy sources continue getting cheaper while also providing communities with increased local tax revenue, land-lease payments and jobs. We now have analysis showing that the Build Back Better framework will reduce electricity costs for millions of Americans. The proposal gives us an opportunity to make our energy sector, and in turn our economy, more stable. Now it is Congress’s turn to pass the Build Back Better plan so we can capitalize on the vast benefits of a clean energy future.
John Coequyt is director of U.S. government affairs at RMI and Uday Varadarajan is principal of RMI’s Carbon Free Electricity Program.
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