Reality Check: The Myth of WV’s Cheap Power
I am a regular reader of the online edition of the Irish Times, published in Dublin, Ireland. As I was reading the paper this morning, I came across this story about a new 6% rate increase that is hitting Irish electric rate payers. The story states that the average residential customer pays and average of 800 euros per year for electricity
Just looking at that figure, I thought it looked pretty low. I did some calculation (divided by 12 and multiplied by the latest currency exchange rate, from the New York Times currency trading report, between the dollar and the euro), and came up with a monthly electric bill in Ireland of 66.67 euros or $85.34 per month.
I wanted to find the same figure for the average residential electric bill in West Virginia. The best source for that information is the annual report of the Consumer Advocate Division of the WV PSC. You can find the average WV residential electric bill amount in Table 8 at the end of the CAD’s 2011 Annual Report, published in 2012, here. The CAD Web site calls it the 2012 report, but the report itself is titled 2011 Annual Report, because it comes from data through the end of 2011. The average electric bill for a WV residential electric consumer is stated in the Report as $98.27.
So we hear all the time from every WV state official and politicians that WV has “cheap” electricity, but the average WV rate payer pays almost $13 per month more than the average Irish rate payer.
Well, you say, WV is a rural state, with a much lower population density. Wrong. Ireland’s most recent population density figure is 65 people per square mile, while WV’s current population density is 77 people per square mile. I’ll let you look up the source of these figures on Wikipedia. The high and low temperatures are certainly more extreme in WV than in Ireland. So the somewhat colder weather in winter and the somewhat warmer weather in summer may account for most or all of the difference.
But does it completely account for the fact that WV residential bills are more than 15% higher than in Ireland? Average annual temperatures in Ireland range from about 47 degrees to about 50 degrees across the country, while WV’s annual average temperature is 51.9 degrees, just a little warmer.
So what’s the difference? The answer to that question is simple. Irish people use less electricity per household. There are lots of reasons for this, but I’ll bet one of them is that the Irish electrical system as a whole is much more efficient that WV’s system which ranks 44th in efficiency among US states.
Why that is true is a much more complicated question. You could claim that by some abstract “standard of living” measure, West Virginians are “better off” than the Irish. Go to Ireland. Live there, even for a short time on vacation. Tell me if the Irish are any less happy or satisfied with their lives than are West Virginians.
There are a lot of social and economic differences between Ireland and WV. Some of them are accurate and should be taken into account, but a lot of them just aren’t relevant or are true of both. For example, one could cite the fact that the Irish are emigrating to the US in relatively large numbers, so they can’t be that happy with their standard of living. But that same outflow of emigration has been a fact of life in WV for decades now.
We could have a long discussion of comparisons between Ireland and WV, but one fact remains – the Irish pay less for electricity than West Virginians. Don’t let someone try to tell you that WV electricity is “cheap” unless they provide you with a lot more information. A lot more.
By the way, in Table 8 of the CAD’s Annual Report, you will also learn that electric rates for the average WV household went up 41.6% between 2008 and 2011.