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Give a Value to Stable Energy Fuel and Disposal Costs

June 28, 2013
Energy Blog Post

Anyone watching the up and down machinations of gasoline prices in Michigan this month, or who can remember when natural gas prices were over $12.00/mcf and not the current $3.89/mcf, must wonder why economists ever try to make energy price predictions. Can they really predict the life cycle fuel cost for the gas-fired power plant proposed by Consumers Energy? Can they really tell us the life cycle disposal costs for the nuclear power plant proposed by DTE Energy? Did they accurately predict the sharp increase in fuel costs when coal prices were flat but coal transportation costs skyrocketed? Imagine a world where fuel costs and disposal costs are fixed for ten, twenty, or thirty years—fixed at zero. It takes away the guesswork; we could dismiss the economists. Distributed and renewable energy—wind, solar, geothermal—convert key variables in the energy equation to “zero”. It is time to give certainty and predictability a value in energy resource planning.

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