Energy & Your Wallet
How could electrification affect your home budget?
For families in Pennsylvania and across the United States, the last few years have been expensive. Record inflation, supply-chain-related product shortages, and disruptions associated with global conflicts have all squeezed household budgets.
Electrification of homes, businesses and roadways comes with a massive price tag — and the burden will fall largely on everyday families and individuals.
These additional costs can be considerable.
In states that have pursued an electrification agenda, we’ve seen programs like Clean Heat Standards and “Cap and Invest” revenue schemes. Whatever the name, these programs amount to new energy taxes. They impose fees or require traditional energy providers to purchase “allowances” or “credits.” Over time, the cost of compliance increases. These fees and taxes end up artificially inflating the cost of your fuel more with each passing year.
And if your school district is forced to electrify its bus fleet, expect your school taxes to balloon (with no additional education resources for your children).
Electrification can inflate the cost of all energy. This happens in several ways. Gas utilities, gas stations, wholesalers, and local, family-run companies that provide heating fuel tend to get hit with fees or forced to buy “allowances” or “credits.” The result is that traditional fuels become more and more expensive.
You can also expect electric rates to increase. Pennsylvania’s grid electricity comes from many of the same sources that could face these new compliance costs. Then you can add to that the costs of updating the grid and increasing renewable power generation — all of which usually end up on people’s electric bills.
Across the country, we are seeing electrification mandates that fundamentally alter how families and businesses heat their spaces and drive their vehicles. However electrification advocates try to spin it, the costs are significant.
Converting a whole home to electric heat pumps in our part of the country has been shown to cost upwards of $20,000.
If transportation regulations limit your selection to only electric vehicles, you could be forced to replace your current car with an EV that costs, on average, $55,000.
Electrification of buildings and roadways isn’t limited to new vehicles and heating equipment. Pennsylvania households would face these tertiary expenses:
- Upgrading their home electrical capacity to accommodate heat pumps and other newly electrified home comfort equipment.
- Removing radiators and plumbing related to boiler systems.
- Potentially needing to remove all gas or oil-powered equipment, including water heaters, stoves and clothes dryers — replacing them with electric models.
- Adding home charging equipment for electric vehicles.
Higher costs are a feature — not a bug — of electrification
While the revenue raised from new taxes, fees, surcharges and allowances is often used to fund grid upgrades, system conversions and other related programs, all these cost increases serve a role beyond raising revenue: they make it more expensive for you to choose any power source other than electricity.
Raising the rates of traditional fuels like natural gas, heating oil, gasoline, diesel and propane is the point. It makes it more and more costly for you to use your traditional furnace, gas-powered car or propane water heater — even if they are highly efficient and provide excellent comfort and convenience.
An objective of these electrification initiatives is to limit your energy choice to grid-based electricity by making the other options painfully (and artificially) expensive.