Computer Model Estimates Impact of Future Energy Rates

A group called the Energy Policy Initiatives Center at the University of San Diego’s law school released a computer model to estimate future electric rates in California.  The model takes into account lots of factors such as prices of renewable sources of energy, sustainability legislation and increases in the supply of energy from solar installations.

The developers of this tool admit that its purpose is not to predict future energy rates, but to estimate the impact of future electric rates.  They also say that the tool is not designed for the average consumer, but for practitioners of energy policy and energy education.

The most surprising discovery that the group made was that the model did not predict increased electric rates if California met it’s goal of 33% of the power coming from renewable sources by 2020.

Personally, I have seen energy rates skyrocket over the past 20 years for various reasons.  According to the financial rule of 72 that all Business School graduates learn, if the average rate increases by 7% per year than your electric bill will double every 10 years.

Consumers who install solar electric systems are able to hedge against rate increases by producing their own electricity.

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