Free Energy can get people off the Rising Energy Rate Wagon!

Why should you look for a way to have free energy? Why do power companies give rebates for alternative power production for homes and businesses? Why consider alternative-energy sources like solar-panels and wind-generators?

These questions are on the minds of people worldwide. As the concern over green house affects on the environment grows so does the concern over ever increasing power rates. Many US customers are eligible for rebates and tax breaks for installing solar-panels, wind-generators, or other alternative power producing improvements on their home. It is sad though that very few are taking advantage of this wonderful opportunity. Many do not understand why a power company would give a rebate so they are suspicious about the opportunity. For excellent information on the tax rebate portion of this article you should check out the US Department of Energy site at

As for the rebates from power companies you need to understand the rate structure that the power company is allowed to charge and how those rates are calculated and approved. I was the Manager of a large Utility for over thirty years and help prepare and pass numerous rate cases during that time period.One of the reasons I am a big proponent of alternative-energy sources. The Utility companies will prepare their rate case for review by a power commission, who in turn will approve or modify the request. In that case are three basic components.

1. The fixed cost of producing power. These are the costs to the power company such as a power plant, dam, maintenance of distribution lines, etc. These costs are fixed regardless of amount of energy produced. So the rate calculation fixes a rate cost per KW sold.

2. Next are variable costs that cover operations, labor, benefits, etc. These are presented based on historical data which include historical average wage increases, insurance costs, health benefits, pensions and so forth.

3. A percentage return on all of their investment. This is a fixed rate built right into the rate structure.

There is one last factor which power companies apply for and that is a fuel adjustment charge. Not very well known by customers but if you review your bill it is listed as a charge that most people never ask or know what it is for. It is calculated by a formula that allows the power company to add on to the rate if the cost of fuel to produce power goes up after rates are past. This fluctuates monthly based on fuel rates for the month. That allows the power company to pass on all those fuel charges to you the customer every month.

Let’s review the rebate question. Let’s for example say that a power company produces one million KW of power at ten cents a kilowatt. Now they give out rebates to people who produce their own power with an alternative source of power such as wind-generated or other sources. The result is that they now sell nine hundred fifty thousand KW. Why would they want to promote such a thing? Well first the rebate is written off their taxes which reduces the power company’s tax payment to the US Government. This of course increases the demand for higher tax on the working class. Even more significant is the fixed cost I spoke about in the rate structure. Since the power company now produces less they will apply for a rate review. The fixed portion of the rate will go up because they now produce less power. This means they will be paid more per KW produced to cover their fixed cost. That is right they get paid the same amount to produce less? It would be like being on a 10 hour work day and being cut to 8 hours but your wage would go up so you make the same amount of money but work two hours less. Produce less and get the same, now that only works in the power production world.

How do you get out of this circle? Well the answer is be one the consumers who produces their own power, gets the rebates and tax breaks to do so and never has to be on the never ending rate increase wagon again. My 30 years in the utility industry and preparing of rate case after rate case helped me make a very quick and good decision to cut my utility bills to near zero. I am well versed on how the rates are formulated and why it is a never ending increase cost to the end power user. I now produce my power and will never be a part of the never ending rate increases again. In addition I am doing my part to reduce foreign oil dependency and to reduce green house gases. Get off the rate wagon and on the power for free wagon. You will be glad you did.

This website contains pages on power production, explanations of wind-generators, solar-panels, Energy-Audit program, and Energy-tips for homes and business. The Energy-Tip news letter will be out soon so watch for it and learn great ways to cut your costs and help in the environmental battle to reduce green house affects.

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