Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Index
Index............................................................................................................................................................................................................1 Shell.............................................................................................................................................................................................................2 Uniq – Prices low.........................................................................................................................................................................................4 Uniq – Prices low.........................................................................................................................................................................................5 Uniq – Renewables Expensive.....................................................................................................................................................................6 Link – RPS...................................................................................................................................................................................................7 Link – RPS...................................................................................................................................................................................................8 LINK – SPS.................................................................................................................................................................................................9 Link – Wind...............................................................................................................................................................................................10 IL – spikes hurt the econ............................................................................................................................................................................11 IL – spikes hurt the econ............................................................................................................................................................................13 IL – spikes hurt the econ............................................................................................................................................................................14 IL – spikes hurt consumer confidence.......................................................................................................................................................15 Consumer Spending key to the Econ.........................................................................................................................................................16 IL – energy prices key to economy............................................................................................................................................................17 US econ key to Globe................................................................................................................................................................................18 Economy Impacts.......................................................................................................................................................................................19 Non-Unique – Prices High.........................................................................................................................................................................20 Non-Unique – Prices high..........................................................................................................................................................................22 Renewables Stabilize Prices......................................................................................................................................................................23 Renewables Stabilize Prices......................................................................................................................................................................24 Spikes don’t hurt the Econ.........................................................................................................................................................................25 Spikes Inevitable........................................................................................................................................................................................26 Spikes won’t happen..................................................................................................................................................................................27 Spikes won’t happen..................................................................................................................................................................................29 A shorter disad because its ultimately pretty simple. Spending new money on renewable energy makes energy prices shoot up. Rising prices hurt the US economy which results in an economic depression and a global war. The aff answers include several Internal Link arguments plus some solid Uniqueness answers. The link turn debate is also good. Those cards argue that renewable energy spending improves the economy by making it more reliable on external sources.

1

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Shell
A. Electricity prices are reasonable Kauffman 8
(Richard, The Huffington Post; “An Open Door to Global Warming”; http://www.huffingtonpost.com/richard-kauffman/an-open-door-to-global-wa_b_111283.html; July 7, 2008)

Business owners are making rational economic decisions. Probably true. It may be that increased electricity costs are offset by more business. Electricity costs are reasonable in the US, with no "cost of carbon" in current electricity prices. There is an inadequate economic incentive to be more efficient. It may also be that there is a free rider problem going on. A particular business owner may not like the idea of contributing to global warming but is worried that if every other business has its doors open, he may have to keep his doors open, too, because he will be otherwise disadvantaged. It may also be that the scope of the problem seems so overwhelming that participants will keep "cheating" as long as they can. Several Washington Senators and Members of Congress have called for another "Manhattan Project" to fund new renewable energy technologies. We don't need a technology breakthrough to have business owners shut their doors in the middle of the summer (some by the way do, the same in the winter, for apparently similar reasons). But perhaps we should spend some money to figure out why they don't.

B. Renewable energy mandates will increase electricity prices Statesman Journal, 7/2/08
(“Expected Power Rates to Rise”, http://www.statesmanjournal.com/apps/pbcs.dll/article?AID=/20080702/NEWS/807020439/1001)

PORTLAND — Already faced with higher food and gas prices, consumers can expect to pay more for power as regional utilities buy expensive wholesale electricity to meet rising customer demand while investing heavily to meet renewable energy mandates. Ratepayer advocates contend the increases could rival those from the 2000-01 energy crisis, when residential rates rose roughly 30 percent and industrial rates increased about 50 percent.

C. Higher energy prices would hurt the economy Energy Tech Stocks, June 30th, 2008
U.S. Power Agency Warns High Electricity Prices Could Plague America ‘For Years to Come’, http://energytechstocks.com/wp/?p=1396

America’s federal power agency has warned that high power prices could plague the nation “for years to come.” Citing high commodity prices for natural gas and coal, which were the fuel sources for 18% and 50%, respectively, of U.S. electricity generation in 2007, the Federal Energy Regulatory Commission (FERC) said this “may be the beginning of significantly higher power prices that will last for years to come.” The agency didn’t say exactly how high it thinks prices could rise, but EnergyTechStocks.com has learned that one major U.S. electric utility is now assuming in its internal forecasts that power prices in its region will double within five years or less. The FERC assessment, rendered on June 19, is particularly worrisome since sky-high electric rates would appear to represent an even greater threat to the U.S. economy than high gasoline prices. That’s because electricity is an even more pervasive aspect of American economic life than gasoline. Indeed, after the oil shocks of the 1970s, all American business essentially became electrified in order to improve efficiency, meet new environmental regulations, and minimize exposure to another oil shock . With U.S. presidential candidate John McCain now leading the charge for cars and trucks that run on electricity, the prospect of sharply higher electric rates for years to come could put a dent in this promising alternative approach to personal transportation. In discussing the future of power on June 19, FERC chairman Joseph Kelliher outlined what might be described as a “no-win” situation that the U.S. finds itself in. He reportedly said, “The United States cannot simultaneously make the massive investments necessary to assure our electricity supply, make additional large investments to confront climate change, and lower electricity prices. Doing so would likely result in failure.” For a U.S. energy official to make such a dour public statement is extraordinary – and a clear warning to investors that, as much as inflationary pressures are starting to hit the U.S. economy, worse lies ahead.

2

Electricity Prices Disad Aff & Neg
D. Economic collapse causes global nuclear war. MEAD 92

Georgia Novice Packet

Walter Russell Mead, Summer 1992. Fellow at the Council on Foreign Relations, NEW PERSPECTIVES QUARTERLY, p. 28..

But what if it can't? What if the global economy stagnates - or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor. Russia, China, India - these countries with their billions of people and their nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the '30s.

3

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Uniq – Prices low
Energy prices will lower because China will decrease comsuption Saulwick and Garnaut 8
(Jacob and John, Writers for The Sydney Morning Herald; “World oil price falls as China cuts fuel subsidies”; http://www.smh.com.au/news/national/world-oil-price-falls-aschina-cuts-fuel-subsidies/2008/06/20/1213770924137.html; June 21, 2008

Following the news, world oil prices immediately dropped $5 a barrel. In Sydney the average price fell by more than two cents to 165.6 cents a litre overnight. The Chinese Government has been under pressure to cut its fuel subsidies, but the decision to raise prices by about 18 per cent took motorists and oil analysts by surprise. The New York oil price slid $US4.75 ($5) to $US131.17 a barrel in response to the decision, after touching $US140 a barrel earlier in the week. Citigroup's Beijing economist, Shen Minggao, said it was only the beginning of bringing prices into line with rising international oil costs. "If the international oil price creeps up further, more adjustments are possible after the Olympic Games," he said in a research note. Subsidised fuel has helped China prevent oil's rising costspilling into price rises in other goods, which would worsen the country's inflation problem. Mr Minggao said the partial removal of the subsidy was likely to improve the efficiency of energy use, and could also lead to a small slowdown in industrial output. "More idle capacity could mean less demand for oil, which will probably have some impact on the global oil price."

Electricity prices are reasonable Kauffman 8
(Richard, The Huffington Post; “An Open Door to Global Warming”; http://www.huffingtonpost.com/richard-kauffman/an-open-door-to-globalwa_b_111283.html; July 7, 2008) Business owners are making rational economic decisions. Probably true. It may be that increased electricity costs are offset by more business. Electricity

costs are reasonable in the US, with no "cost of carbon" in current electricity prices. There is an inadequate economic incentive to be more efficient. It may also be that there is a free rider problem going on. A particular business owner may not like the idea of contributing to global warming but is worried that if every other business has its doors open, he may have to keep his doors open, too, because he will be otherwise
disadvantaged. It may also be that the scope of the problem seems so overwhelming that participants will keep "cheating" as long as they can. Several Washington Senators and Members of Congress have called for another "Manhattan Project" to fund new renewable energy technologies. We don't need a technology breakthrough to have business owners shut their doors in the middle of the summer (some by the way do, the same in the winter, for apparently similar reasons). But perhaps we should spend some money to figure out why they don't.

Demand for energy prices is decreasing now Wall Street Journal, 7/10/08
(Keith Johnson, “Gas Pains: Falling U.S. Demand Doesn’t Make a Difference“,http://blogs.wsj.com/environmentalcapital/2008/07/10/gas-pains-falling-us-demand-doesnt-make-adifference/)

Now that Americans are finally curbing their oil addiction in the face of high prices—what if it doesn’t matter anymore? Ana Campoy in the WSJ reports that American drivers are getting even more skittish about getting behind the wheel: Gasoline demand fell more than 3% in early July compared to last year, after dips of 2% in June and 1% in April. Gasoline consumption over the Fourth of July weekend hadn’t been so low since 2003, all because average gasoline prices are now at $4.10 a gallon. Americans hope market economics will work—as demand falls, the hope is that crude oil and gasoline prices fall, too. Gasoline stocks are accumulating, even as refiners are moderating supply. Analysts have no worries there will be plenty of gasoline this summer. Some
analysts see a light at the end of the crude-oil tunnel.

4

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Uniq – Prices low
Natural gas prices decreasing now International Business Times, 7/10/08
(“Natural Gas Weekly Update - Jul 10”, http://www.ibtimes.com/articles/20080710/natural-gas-weekly-update-jul-10.htm)

Natural gas spot prices declined sharply this report week (WednesdayWednesday, July 2-9), with the largest decreases generally occurring in consuming regions in the Northeast and Midwest. During the report week, the Henry Hub spot price decreased $1.22 per million Btu

(MMBtu) to $12.09.

Utility companies are keeping prices lower
Barry Moline ’08 (Tallahassee Democrat; “Fuel costs affect your utilities, too”; http://www.tallahassee.com/apps/pbcs.dll/article?AID=/20080710/OPINION05/807100310/1006/OPINION; July 10, 2008)

While utilities can't control the price of fuel, most utilities work to limit the cost to customers. We use a portfolio of strategies and methods for containing costs so that customers do not bear the full brunt of rapid price increases. Some utilities are negotiating fuel price hedging contracts and others are developing ways to generate electricity more efficiently, all in an effort to protect customers from the volatility of rising fuel costs. Many utilities are also increasing their use of renewable fuels, although some cost even more than oil, coal and natural gas.

5

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Uniq – Renewables Expensive
Renewable energy costs more than non-renewable energy CNN, 7/2/08
(“Va. utility proposal hinges on renewable energy”, http://money.cnn.com/news/newsfeeds/articles/apwire/22d88fcc09197d9c5a7b212ccd6a3fe1.htm)

NEW YORK (Associated Press) - Utility Appalachian Power wants to give its Virginia customers the option of choosing renewable sources for their energy needs. The subsidiary of American Electric Power Co. Inc. asked the Virginia State Corporation Commission on Tuesday to approve a billing option that would charge customers to select renewable energy sources. Customers who select a renewable energy source will pay an additional $1.50 over their usual power costs for each 100 kilowatt hours of that energy source. The program will initially use energy and renewable energy credits associated with the Summersville, W.Va., Hydro Plant.

An increase in renewable energy would increase electricity prices David Enke, Faculty fellow of finance and professor at University of Tulsa, 6/30/08
(“Will Electric Power Cause the Next Price Shock”, http://www.istockanalyst.com/article/viewarticle+articleid_2351049&title=Will_Electric_Power.html)

According to the Energy Information Administration (EIA), 49.0% of electricity is generated from coal, 20.0% from natural gas, 19.4% from nuclear, 7% from hydro, 1.6% from petroleum, with the remaining 3.1% from other sources, part of which are alternative energy sources not listed (solar, wind, etc.). Approximately 9.5% of electricity generation is currently from renewable sources. If Congress has its way, this number will increase as restrictions on carbon emissions get enacted. While everyone would like to see lower carbon emissions and a cleaner environment, such legislation will have consequences, many of which will be unintended (ethanol anyone?). Hopefully some of these consequences will be considered as we move forward as a country toward developing some type of energy policy, because while we all know about the high cost of gasoline, and the impact that burning this fuel has on our environment, we are also beginning to feel the effects of ethanol mandates, which even with their good intentions are producing unintended consequences of higher food and commodity costs. Unfortunately, electricity prices are the next form of energy that is likely to feel the effects of high commodity prices, regulation, and legislation in a way that is similar to the current impact of high crude oil prices.

Renewable energy mandates will increase electricity prices Statesman Journal, 7/2/08
(“Expected Power Rates to Rise”, http://www.statesmanjournal.com/apps/pbcs.dll/article?AID=/20080702/NEWS/807020439/1001)

PORTLAND — Already faced with higher food and gas prices, consumers can expect to pay more for power as regional utilities buy expensive wholesale electricity to meet rising customer demand while investing heavily to meet renewable energy mandates. Ratepayer advocates contend the increases could rival those from the 2000-01 energy crisis, when residential rates rose roughly 30 percent and industrial rates increased about 50 percent.

Renewable energy is unpopular with states- customer prices and implementation costs are too high Forbes, 6/27/08
(Ray Henry, “Rhode Island governor vetoes renewable energy bill”, http://www.forbes.com/feeds/ap/2008/06/27/ap5163444.html)

Gov. Don Carcieri said Friday he has vetoed a bill that would force the state's major power company to buy renewable energy for 10 years at a time, a requirement that lawmakers approved to stimulate investment in wind turbines and solar power projects. The proposal was supposed to fix a problem that renewable power advocates say blocks the construction of major green energy projects here: a lack of large customers willing to buy the power. Without a dedicated buyer, banks and investors will not fund the projects. As a solution, lawmakers voted to force National Grid, the state's largest electricity distributor, to buy enough renewable power to supply about 9 percent of Rhode Island's electricity needs by 2013. In return, National Grid, which supported the bill, would receive a payment equal to 3 percent of the renewable power it bought. In a letter to lawmakers explaining his veto, Carcieri said the bill could increase costs for customers. He said the bonus payment to National Grid was too generous and faulted the legislation because it gives preferential treatment to solar power projects, which Carcieri believes are too expensive.

6

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Link – RPS
RPS will significantly jack up energy costs for several reasons – the standard has no chance of being met NAM 7 - National association of Manufactureres
("PROTECT ELECTRICITY CONSUMERS FROM RATE INCREASES: OPPOSE THE BINGAMAN RENEWABLE PORTFOLIO STANDARD AMENDMENT", unknown date in 07 http://www.nam.org/s_nam/doc1.asp?CID=202504&DID=226878)

* Based on a July 21 version, the Bingaman amendment would establish a nationwide, mandatory renewable portfolio standard (RPS) beginning in 2008. All electricity suppliers that sell more than 4 million megawatt-hours of electricity to consumers would be required to generate power from a limited number of renewable energy resources (excluding most hydropower) or buy renewable energy credits, equal to a specified percentage of their retail electric sales. * The RPS percentage requirements would start at 2.5 percent in 2008 and increase to 10 percent by 2020. A cap of 1.5 cents per kilowatt-hour is imposed on the cost of the renewable energy credits, which would increase with inflation. <The RPS Amendment Would be Costly to Consumers * The amendment would impose a significant increase in electricity costs on consumers. The Bingaman RPS amendment could cost as much as $127 billion in higher electricity prices for consumers over the life of the mandate. At its peak in 2030, the RPS mandate could cost consumers almost $10 billion in higher electricity prices. * The RPS amendment is really just an energy tax on traditional energy resources, such as coal, natural gas and nuclear energy. The RPS percentage targets are so unrealistic that they cannot be fully met by only building new renewable generation. Utilities will be forced to purchase renewable energy credits from the federal government or companies trading credits to meet their mandated RPS requirement. * The costs of renewable energy will be an “add-on” to providing reliable, around-the-clock power to consumers. Many renewable energy resources are intermittent by nature. Utilities cannot tell their consumers that they will deliver power only when the wind blows or the sun shines. Utilities will still need to build generating facilities using conventional fuels—most likely natural gas—to meet consumers’ needs for reliable power on short notice. * RPS costs will be imposed concurrently with massive environmental costs. Power generators are expected to incur new environmental compliance costs of $5-10 billion annually within the next decade to deal with air quality requirements related to ozone, particulate matter, mercury and other issues. Imposing a multi-billion dollar RPS mandate on top of that, during roughly the same time frame, could be a crushing blow to a critical sector of our nation's economy. * An RPS mandate will also require additional indirect costs. New high-voltage transmission lines often must be built in order to move electricity from wind energy facilities, which are usually located in remote areas, across long distances to populated areas where the power is needed. These transmission expansions can cost approximately $1 million to $3 million per mile to build.

States that can’t readily use renewables will be especially hard hit and face higher prices
Yeatman & Ebell, 7 – * Energy Policy Analyst at the Competitive Enterprise Institute and ** Director of Energy and Global Warming Policy at CEI
(William Yeatman and Myron Ebell, “Gone with the Wind: Renewable Portfolio Standard Threatens Consumers and the Industrial Heartland,” 6-12-2007, No. 114, http://cei.org/pdf/5982.pdf) Determinants of RPS Impact. While

a one-size-fits-all federal RPS would impose uniform requirements nationwide, the costs would be far from uniform. The effect of renewable energy targets on electricity cost is determined chiefly by two factors—the cost of conventional generation and the renewable resource
potential of the area in question. The relationship of each factor to the marginal cost of an RPS is straightforward. It costs more to generate electricity from renewable sources than from conventional sources. That is why significant renewable capacity is currently being added only in states that have already passed renewable requirements. This is the case even though most forms of renewable energy have received large federal subsidies for decades. For example, wind generation receives a 1.9 cents-per-kilowatt-hour production tax credit. (In 2006, the average cost of electricity was 8.37 cents per kilowatt hour.) The first factor affecting the price of electricity in a state with an RPS is the state’s current mix of conventional sources which, as can be seen in Map 1, varies considerably between the states. Map 1 should be compared with Maps 3 and 4. The regions of the country that rely most heavily on coal-fired generation are generally also the regions with the lowest electricity rates and the highest concentrations of manufacturing. This is not a coincidence. The second factor is the potential for renewable energy being spread unevenly across the country. For example, the

southern and middle parts of the country have low potential for wind power, which is the renewable energy resource that is closest to the market costs of conventional energy, given current federal subsidies. And although wind energy produced, for example, in Oklahoma could be transmitted to Georgia, the additional transmission costs greatly increase the total costs of that energy to the receiving state.

7

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Link – RPS
A national RPS will jack up electricity costs Fershee, 8 – Assistant Professor of Law at the University of North Dakota School of Law
(Joshua P., Energy Law Journal, “Changing Resources, Changing Market: The Impact of a National Renewable Portfolio Standard on the U.S. Energy Industry,” 29 Energy L. J. 49, Lexis-Nexis Academic)
3. The Criticisms: The Case Against a National RPS Like any major energy policy in which there will be winners and losers, there are several arguments against a national RPS. Even if an energy policy ends in a net gain, there will be those who will not come out ahead in the game. n67 The primary arguments against a national RPS are that it could lead to increased consumer costs, that the RPS amounts to a wealth transfer from states with lower levels of renewable resources to states with high levels, and that it is unnecessary and better handled at the state level. There are additional arguments against the Proposed RPS that are critical of the current plan as drafted, including complaints about the limited scope of what is renewable n68 and the actual level of the RPS, n69 but this section of the Article focuses only on criticisms of a national RPS.

Some major studies indicate a potential increase in consumer electricity costs if a national RPS were implemented. The Energy Information Administration (EIA) released a study in June 2007 of a proposed 15% RPS by 2030, which indicated that "cumulative residential expenditures on electricity from 2005 through 2030 are $ 7.2 billion (0.4 percent) higher, while cumulative residential expenditures on natural gas are $ 1.0 billion (0.1 percent) lower." n70 For a 25% RPS by 2025, the costs would likely be much more significant: "the cost of complying with the [25% RPS] is projected to increase the price of electricity by about 3.3 percent and 6.2 percent in 2025 and 2030, respectively." n71 On a more local level, opponents of the Proposed RPS have claimed that consumers in some states could see electricity bills rise as much as $ 15 per month. n72

A National RPS will increase electricity rates Morrison, 6 – Senior Regulatory Counsel
(Jay, Electricity Journal, “Mandated RPS Ignores Economic, Political Reality,” December 2006, vol. 19, no. 10, p.3, Lexis-Nexis Academic)
In "Green Means 'Go?'-A Colorful Approach to a U.S. National Renewable Portfolio Standard" (Aug./Sept. 2006), Benjamin K. Sovacool and Christopher Cooper argue, among other things, that a renewable portfolio standard (RPS) could reduce energy costs for consumers. Respectfully, I would submit that that position ignores economic, engineering, and political reality. Before addressing that issue, I would like to make clear that the National Rural Electric Cooperative Association (NRECA) agrees with the authors that it is important for the nation to take responsible steps to increase the use of cost-effective renewable energy. As an early supporter of the Ag-Energy Working Group, NRECA endorses the goal of obtaining 25 percent of the nation's energy supplies from renewable resources by 2025. NRECA's members are leaders in the renewable energy field, offering their consumers power from every form of renewable resource. NRECA also supports a broad range of policies that promote the use of renewable energy without increasing rates for electric consumers.

Renewable energy mandates, however, like those supported by the authors, will increase electric rates to consumers. This should be apparent on its face. Any mandate creates an artificial market for a commodity. If the market demand cannot be met immediately by new entry, the basic laws of supply and demand will force up the price of the commodity. And, there are probably few markets in the United States with as many barriers to entry as the electric utility industry.

Massachusetts proves our link Morrison, 6 – Senior Regulatory Counsel
(Jay, Electricity Journal, “Mandated RPS Ignores Economic, Political Reality,” December 2006, vol. 19, no. 10, p.3, Lexis-Nexis Academic)

Perhaps the best example is Massachusetts. The Commonwealth of Massachusetts has one of the oldest and most established RPS in the country. Adopted in 1997, the RPS requires 2.5 percent renewable energy in 2006. Despite its long life, however, the RPS has led to the construction of very little new renewable generation. While the travails of the Cape Wind Project off of Cape Cod are best known, other land-based wind projects in the Commonwealth have also been blocked by political opposition. The result? Notwithstanding modest goals, recent auctions for renewable energy credits in Massachusetts cleared for over $52/MWh, just short of the $55.13 safety valve in the state program. Load-serving entities in Massachusetts must pay that in addition to the cost of the energy itself, effectively doubling the cost to consumers of that portion of power that must be provided from renewable energy. A mandate such as an RPS is also certain to raise rates where the mandated commodity must substitute for lower-cost products. This is the reason why an analysis issued by the nonpartisan Washington Research Council recently concluded that the RPS initiative on the ballot in Washington State would increase utilities' power expenses by 4 to 8 percent and cost between 3,600 and 7,100 jobs in the state. As I-937 was written, it would force many cooperatives and public utility districts to replace very-low-cost renewable hydropower with other, more expensive forms of renewable energy.

8

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

LINK – SPS
SPS will be used to replace current fossil fuel and nuclear plants
Nansen, 95 - led the Boeing team of engineers in the Satellite Power System Concept Development and Evaluation Program for the Department of Energy and NASA, and President Solar Space Industries (Ralph, Sun Power, http://www.nss.org/settlement/ssp/sunpower/sunpower09.html) The real potential, however, is the ability to add generating capacity as the demands for energy grow. After meeting new energy requirements we could start replacing the existing fossil fuel plants and obsolete nuclear plants. A large percentage of the current power plants in the country are wearing out, and maintenance costs are accelerating as they reach the end of their useful life. They could be replaced with solar power satellites, thus eliminating the demand for fossil fuels as our major energy source and starting the process to clean up our atmosphere. Once this is done, a more natural growth can occur. With the availability of ample low-cost electricity, the move could be made to replace a large share of the transportation requirements with electric power vehicles as well.

SSP generates such reliability in the electricity sector that it will jumpstart the electric car industry and replace oil and natural gas
Prado 2, - physicist, former U.S. DOD space engineer and consultant multinational engineering and construction companies (Mark, “Environmental Effects of SPSs on Earth,” http://www.permanent.com/p-sps-ec.htm) // CCH The SPS poses a clear alternative to coal and nuclear power plants. But what about oil and natural gas? Can the SPS reduce the vulnerability of the world economy to oil cutoffs (e.g., due to a Middle East war, terrorism, or embargoes)? Would it be wise to divert our budgets away from wasteful military hardware and invest it into space development (by direct government subsidization and/or massive tax incentives)? Do we need a lead time well before oil supply starts to fall short of oil demand? Yes. The "Electric Economy" concepts -- electric heat, electric vehicles, synthetic liquid fuels made with the help of electrical energy -would reduce the growing world economies' vulnerability to energy shortages. This means using clean electrical energy in place of natural gas heating, and making synthetic liquid fuels from natural gas, coal, and hydrogen gas from water electrolysis. Electric cars would be more popular if parking lots at work, shopping centers, etc., were equipped with simple plug-in recharge meters. Electric cars are clean and quiet. Liquid fuel for long range vehicles is the main energy source which SPS electricity cannot substitute for directly. However, it can substitute indirectly by providing energy in making synthetic fuels. Also, by using electrical energy in place of oil and natural gas wherever possible, oil and natural gas are liberated for use in long range vehicles.

SPS is key to decrease our dependence on foreign oil and natural gas
Nansen 2000 - President Solar Space Industries, (Ralph, Statement to the United States Congress Subcommittee on Space Science “The Technical Feasibility of Space Solar Power” Before the Subcommittee on Space and Aeronautics, United States House of Representatives Committee on Science September 7, 2000, http://www.spaceref.com/news/viewpr.html?pid=2571) // CCH Energy demand continues to grow as our population expands. The electronic age is totally reliant on electric power and is creating a new need for electric power. Many areas of the nation are experiencing energy shortages and significantly increased costs. United States electricity use is projected to increase by 32% in the next twenty years while worldwide electric energy use will grow by 75% in the same period. Worldwide oil production is projected to peak in the 2010 to 2015 time period with a precipitous decrease after that due to depletion of world reserves. Natural gas prices in the United States have doubled in the last year as the demand has grown for gas fired electrical generation plants.
Global warming and the need for reduction of CO2 emissions calls for the replacement of fossil fuel power plants with renewable nonpolluting energy sources. Even with increased use of today's knowledge of renewable energy sources carbon emissions are expected to rise 62% worldwide by 2020. If we have any hope for a reversal of global warming we must dramatically reduce our use of fossil fuels.

Solar power satellite development would reduce and eventually eliminate United States dependence on foreign oil imports. They would help reduce the international trade imbalance. Electric energy from solar power satellites can be delivered to any nation on the earth. The United States could become a major energy exporter. The market for electric energy will be enormous. Most important of all is the fact that whatever nation develops and controls the next major energy source will dominate the economy of the world.

9

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Link – Wind
Wind power drives up electricity prices- turbine demand, dollar value depletion, and transportation costs Statesman Journal, 7/2/08
(“Expected Power Rates to Rise”, http://www.statesmanjournal.com/apps/pbcs.dll/article?AID=/20080702/NEWS/807020439/1001)

Renewable power is one answer, and PGE, like other utilities, is adding wind farms to meet a new state mandate requiring it to generate 25 percent of its electricity from renewable sources by 2025. The wind is free, but it costs hundreds of millions to build large wind farms. Moreover, the price is escalating because of the worldwide demand for turbines, a plummeting dollar and rising costs for everything from steel and concrete to transportation.

Wind energy is expensive- demand for turbines outstrips supplies Renewable Energy World, 7/1/08
(Lisa Cohn, “Westward Ho! US utilities scramble for wind”, http://www.renewableenergyworld.com/rea/news/reworld/story?id=52691)

‘It doesn’t matter what it costs to build,’ says Mark Tallman, vice president of renewable resource acquisition for PacifiCorp, also based in Portland. ‘It’s what people ask when they want to sell the output. California has set a market price referent (MPR) close to $100/MWh. Given that they’re allowed to spend that much, the price might go that high,’ adds Tallman. In addition, global issues are at play, with the weak value of the dollar, worldwide shortages of turbines and the increased cost of manufacturing the components needed to get projects up and running, all affecting prices. ‘The real shortage is the supply of wind turbines. It’s not the wind energy. It’s not the projects. Demand outstripping supply is a worldwide phenomenon,’ says Stuart Hemphill, director of renewable and alternative power for Southern California Edison (SCE).

Wind power will increase consumer’s electricity bills- development of turbines and wind farms Tony Lodge, Research Fellow, Centre for Policy Studies, 7/7/08
(“Wind Chill – Why wind energy will not fill the UK’s energy gap”, http://www.egovmonitor.com/node/19842)

This huge increase in renewables, particularly wind, will require a substantial increase in the amount of money taken from consumers’ electricity bills to subsidise new wind farms through the Renewables Obligation (RO). The RO is the Government’s principal policy instrument to encourage the development of the renewable electricity sector. It is an indirect subsidy system drawing funds from consumer bills and passing them to the renewable electricity sector. This currently amounts to £1 billion a year, an amount which will have to rise significantly to fund the construction and development of thousands of new turbines.

10

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

IL – spikes hurt the econ
High energy prices will hurt the economy Fox News, June 17, 2008
Rising Prices, Growth Help Slow Economy, http://fox40.trb.com/news/ktxl-061708econ,0,7319916.story

WASHINGTON — Wholesale prices barreled ahead while housing and industrial activity faltered - a

blend of high-costs and slow growth that ensures the Federal Reserve's most likely move on interest rates next week will be no move whatsoever . There's some Catch 22 for the Fed in all of this, and
Chairman Ben Bernanke and his colleagues have made increasingly clear they're not inclined to cut interest rates further for fear of aggravating inflation. On the other hand, if they act too quickly at the June 24-25 meeting to boost rates to fend off inflation, it would hurt an economy already battered by housing, credit and financial woes. "The Fed is in a box," Ken Mayland, president of ClearView Economics, said after the latest batch of economic barometers were released Tuesday. That's why many economists are predicting the Fed will hold rates steady at 2 percent, a four-year low, at next week's session. The Labor Department's Producer Price Index, which measures the costs of goods before they reach store shelves, leaped 1.4 percent in May, the biggest increase in six months. Galloping energy and food prices, which are especially squeezing business profits, figured prominently in the index's pickup. The economy's problems and high prices for fuel and raw materials

are taking a toll on manufacturers and others. The Federal Reserve reported that industrial productions fell 0.2 percent in May, the second straight monthly decline. Plants operated at only a 79.4 percent capacity, the lowest since September 2005 after the Gulf Coast hurricanes. And, there was more fallout from a deeply depressed housing market. The number of new housing projects started in May fell 3.3 percent to a 975,000 pace - the lowest in 17 years - as builders pulled back further. Builders are smarting as unsold homes as well as foreclosed homes pile up, adding to already swollen supply. Sagging demand from would-be buyers and - more recently - rising mortgage rates,
are adding to builder headaches. "Builders are doing the exactly the right thing - cutting back," said David Seiders, chief economist at the National Association of Home Builders. "Now I'm a little more worried on the interest rate front. I think we'll see mortgage rates recede to some degree. If not, it will be a tougher road for housing than anticipated," Seiders said. The housing slump has been the biggest drag on the economy, which has slowed sharply in recent months. The Fed and the Bush administration are hoping that the central bank's powerful rate cuts since last September - which take months to work through the economy - along with the government's $168 billion stimulus effort - will help lift the country out of its doldrums. It's a gamble, though, as expensive food and gas could force people and businesses to hunker down even further. Yet another report Tuesday showed that the country's "current account" deficit, which is the broadest measure of trade, widened to $176.4 billion in the first quarter, up from $167.2 billion in the final quarter of last year, as the U.S.' foreign oil bill soared. The current account report covers not only goods and services but also investment flows between the United States and other countries. Some fear that the nation could be headed for a bout of "stagflation," a toxic mix of stagnant economic growth and inflation not seen in decades. But Bernanke - who has ramped up his tough anti-inflation talk over the past few weeks - has said that's not the case. Bernanke also has said he doesn't see a repeat of a 1970s-style situation where workers demanded - and received - big pay increases to cover rapidly rising prices. In the PPI report, when energy and food costs were disregarded, the so-called "core" prices rose a much more modest 0.2 percent in May, an improvement from April's 0.4 percent increase. That suggested that other prices were better behaved. Still, there are growing concerns that rising energy and food costs will eventually force companies to boost prices for lots of other goods and services, spreading inflation through the economy. That's why Wall Street investors predict the Fed will be forced to boost rates later this year to combat inflation. Others, however, think the Fed won't have to start to raise rates until next year. Over the past year, overall producer prices have gone up 7.2 percent, while "core" prices have increased 3 percent. Energy prices were up 4.9 percent in May, the most since November. Diesel fuel prices jumped 11.2 percent, gasoline prices rose 9.3 percent and home heating oil increased 8 percent. Food prices went up a sharp 0.8 percent, the most since March. Soaring energy and food prices, which have wracked up a string of record highs in recent days, are walloping consumers and businesses alike. Energy prices eased a bit Tuesday, with oil hovering around $134.19 a barrel and gas prices at $4.078 a gallon. Last week, the government reported that consumer prices surged by 0.6 percent in May, the biggest increase in six months . Those

higher prices also are cutting into workers' paychecks - further straining household budgets. Wholesale prices are rising faster than consumer prices because businesses - for competitive or other reasons - have been limited in their ability to pass along to consumers all of their higher costs from energy and other raw materials. The Fed is hoping such restraint will continue. "For now the Fed seems content to talk
tough" against inflation, said Stephen Stanley chief economist at RBS Greenwich Capital. "This strategy is risky."

Perception of high energy prices hurts investment Herald Tribune, May 19, 2008
Signs that rising energy prices are taking a toll hurt stocks, http://www.iht.com/articles/2008/05/19/business/19marketsfw.php

Most U.S. stocks fell after SanDisk said record energy prices hurt sales, spoiling a rally in technology shares. The Standard & Poor's 500 stock index advanced to the highest level since January, boosted by oil companies. SanDisk tumbled the most since March after the largest maker of flash-memory cards said April sales were "soft." Goldman Sachs Group, Morgan Stanley and Lehman Brothers Holdings Inc. led financial shares lower after Citigroup reduced earnings estimates on Wall Street's biggest firms. Exxon Mobil and Chevron gained, sending energy shares to a record and boosting the Dow Jones Industrial Average, as crude climbed above $127 a barrel. About 15 stocks retreated for every 14 that rose on the New York Stock Exchange. The Standard & Poor's 500 Index added 1.28 points to 1,426.63. The Dow average increased 41.36 to 13,028.16. The Nasdaq slipped 12.76 to 2,516.09. "This rally may be in for a pause," said Jeffrey Kleintop, chief market strategist at LPL Financial in Boston. "We have seen a slowdown in discretionary consumer spending, and boy you'd have to say that applies to high-tech gadgets." The S&P 500 climbed as much
as 1 percent earlier after the Conference Board said its index of leading U.S. economic indicators rose in April for a second month. The gauge increased 0.1 percent, a sign the economy may recover in the second half of the year. Economists in a Bloomberg survey forecast the measure to be unchanged. The dollar gained the most against the euro in four days and strengthened versus the yen after the index of leading U.S. economic indicators unexpectedly rose in April. The greenback gained versus 13 of the 16 most-actively traded currencies, including the Brazilian real and British pound. The yuan rose to the highest level since the end of its dollar link in

11

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

2005 after U.S. Treasury Under-secretary David McCormick urged China to quicken currency reforms. "Any hint toward stabilizing in the U.S. could be seen as bearish for the euro," said Benedikt Germanier, an analyst with UBS AG in Stamford, Connecticut. "Investors are buying the dollar against the euro on dips."

12

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

IL – spikes hurt the econ
High energy prices will cause inflation Sustainable Facility, September 30, 2000
Energy Prices Eyed as Threat to U.S. Economic Balance, http://www.sustainablefacility.com/Articles/Industry_News/91562ad74be38010VgnVCM100000f932a8c0

Economists are keeping a wary eye on energy prices, with some predicting that continued high oil prices and short supplies of natural gas could contribute to an inflationary spiral. While other factors could also upset the current equilibrium of the economy, energy prices, for now, appear to be the most volatile. Economists say that rising prices have already had an impact on economic growth and have added as much as one percentage point to the consumer price index over the past year. After a price spike earlier in the year, crude oil prices
dropped. However, in late August, crude prices closed at a five-month high of more than $33 a barrel on the New York futures market. That level is up from $10 a barrel in January 1999. Analysts point out that the economy is less sensitive to oil price increases than it was in the 1970s, but don't discount the impact that a harsh winter and increased demand could have. In its Short Term Energy Outlook, the Energy Information Administration (EIA) warned that natural gas market activity

"continues to reveal the...vulnerability of the U.S. market to potential supply shortfalls, particularly in view of burgeoning power sector demands and large potential increases in heating demand just a few months down the road." Since June, daily spot wellhead prices have
been averaging between $3.50 and $4.50 per thousand cubic feet, the EIA report says. This is nearly double the price of one year ago and as much as a $2 per thousand cubic feet gain since the beginning of the year. Although rising crude oil prices may have encouraged natural gas prices to grow, the principal basis of these raised gas prices has been the precarious supply situation, according to the report. Contributing to the low storage injection rate, the EIA said, has been hot summer weather in portions of the country, particularly Texas and California (which consume large amounts of gas-generated electricity). Natural gas that would normally be added to storage has, to some extent, been used (indirectly through electric utilities) to run air conditioners. Furthermore, demand for natural gas has been growing due to the expanding economy over the last 7-8 years and the gowing use of gas at power facilities. Low inventories for distillate will exert upward pressure on distillate fuel oil prices when the heating season begins in October, the EIA report warned. With the summer more than half over, the level of distillate stocks remains low, creating the possibility of price instability for the distillate fuels when the heating season commences. Last February, a similar scenario, including severe weather in the Northeast and extremely low inventories of distillate fuel, led to heating oil and diesel fuel prices that temporarily averaged more than $2 per gallon in New England and other areas in the Northeast. Current stocks of high-sulfur distillate fuel oil (heating oil), particularly in the Northeast where most of the nation's heating oil is consumed, are currently at low levels.

13

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

IL – spikes hurt the econ
Higher energy prices would devastate the economy Ron Scherer (Staff writer of The Christian Science Monitor) February 21, 2008
Soaring energy prices bad news for the economy, http://www.csmonitor.com/2008/0221/p03s01-usec.html

New York - Once again, concern is rising about the price of oil and gasoline. On Tuesday, the price of oil hit a record $100.01 a barrel, up some $14 in eight trading days. It's the second time since late December that the price has hovered at the $100-a-barrel level. The sharp rise is already showing up at the gas pump: Between Tuesday and Wednesday, the price of gasoline rose 4 cents a gallon, reports GasPriceWatch.com. Since Feb. 9, gasoline prices nationally are up 10 cents a gallon, for an average price of $3.05 a gallon. For the economy, the run-up could not come at a worse time. Many economists believe the US economy is

teetering on the edge of a recession. Higher energy prices act as a tax on consumers, absorbing money that would normally be used to buy other things. If energy prices remain this high – or go higher – they could begin to eat into the rebate checks that the government is planning to start sending taxpayers in May. "This is bad for the consumer and the economy," says Dennis Jacobe, chief economist at the Gallup Organization in Washington. "It will be an offset to the fiscal stimulus everyone is talking about." Motorists are paying much
higher prices than they were a year ago. According to GasPriceWatch.com, gasoline prices are up 51 cents a gallon from a year ago, when the price of oil was closer to $60 a barrel. On Wednesday, some of those price increases were reflected in a sharp rise in the Consumer Price Index, which rose by 0.4 percent in January, compared with December. Energy rose 0.7 percent. Yet even with energy and food excluded, the CPI was up 0.3 percent – much higher than the Federal Reserve would like to see. The last time oil prices reached this level was at the end of December. Then, oil prices fell back to about $86 a barrel. Energy analysts talked about the price of a barrel of oil settling in for 2008 in the low $80s. But since then, reports have surfaced that the Organization of Petroleum Exporting Countries (OPEC) might cut production when it meets in the first week of March. OPEC currently produces close to 30 million barrels per day. On Feb. 13, the International Energy Agency (IEA) cut its estimate of demand by 200,000 barrels per day to reflect the slowing US economy . "If OPEC does follow through and cut, it's not very helpful to the market," says John Felmy, chief economist at the American Petroleum Institute in Washington. "Why cut at these prices?" Mike Fitzpatrick, who heads up the risk management group at MF Global in New York, blames the latest spike on hedge funds or wealthy individuals buying energy futures as an inflation hedge. "The logic is that stock and bond markets are down, so the best bet is commodities ," says Mr. Fitzpatrick. But Fitzpatrick says the market is also being swayed by a number of small events, such as a small refinery fire in Texas, the continued sparring between Exxon-Mobil and Venezuela's president, and news reports that oil field violence is heating up again in Nigeria. "We're all scratching our heads," he says. While oil traders are trying to understand the dynamics of their market, economists are worried about consumers as they watch oil prices tick up. In Dayton, Ohio, people are doing less driving early in the week, when prices are higher (prices tend to come down later in the week), says Brad Proctor, founder of GasPriceWatch.com, which is based in Dayton. "People are adapting," he says. Yet so far, consumers have shown some resilience. On Tuesday, Chicagobased ShopperTrak RCT reported that retail sales in February rose 5.9 percent for the week ending Feb. 16. For the month, it's running at about a 2 to 3 percent increase, says Bill Martin, co-founder of ShopperTrak. "Call it moderate spending to this point, not too fast and not too slow," says Mr. Martin. "People are continuing to buy things that they need." But the International Council of Shopping Centers is reaching different conclusions. On Wednesday, it

reported no week-to-week increase in sales and it proclaimed in a press release that consumers were not in the mood to spend. How much gasoline prices rise may have an effect on consumer confidence. "A change of 10 cents a gallon either up or down won't make much of a
difference in confidence levels," says Lynn Franco, director of the Conference Board's Consumer Research Center in New York. "Following hurricane Katrina, some gasoline prices went up to $3.50 a gallon, and we had lines at gas stations. So there was much greater apprehension." But Mr. Jacobe says his surveys are starting to show a sharp deterioration in consumer confidence. "It's down considerably from the first week of January," he says. How high gasoline prices rise could well determine the effectiveness of Congress's attempt to stimulate the economy. In May, the first checks for $600 for individuals and $1,200 for couples (plus $300 per child) will hit mailboxes. Assuming that an average person drives 15,000 miles annually and gets

about 17 miles per gallon, Martin estimates that his or her annual gasoline usage is 882 gallons. A rise of 11 cents a gallon would take about $97 out of his or her federal rebate check. A rise of $1 a gallon would take $882. "It is tenuous times we live in," Martin says.

14

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

IL – spikes hurt consumer confidence
Consumers are hit hard by rising electricity prices on top of rising fuel prices
USA Today, “Price jolt: Electricity bills going up, up, up”, By Paul Davidson, http://www.usatoday.com/money/industries/energy/2008-06-15-power-prices-rising_N.htm, June 20, 2008
Even more dramatic rate increases are ahead. The mounting electric bills will further squeeze households struggling with spiraling gasoline prices. "Consumers now face a tough reality on electricity," says Mark Cooper of Consumer Federation of America. The increases come after rising fuel prices already have driven up utility bills nearly 30% in the past five years, the sharpest jump since the 1970s energy crisis. Fuel costs are again the main culprit. In Virginia, Potomac Edison, citing high coal and natural gas prices, plans to raise rates 29% on July 1, pushing an average monthly residential bill from about $70 to $90. AmerenUE, Missouri's largest utility, recently asked for its first rate increase in 20 years, a 12.1% boost, mostly to cover higher fuel costs. Customers of Public Service Co. of Oklahoma were socked with a 25% rise on June 1. The price of coal, which fires half of U.S. power plants, has doubled since last year, largely because of surging energy use in countries such as China and India. Natural gas prices are up nearly 50% on high U.S. demand. In California, drought has forced Pacific Gas & Electric to replace cheap hydroelectric power with natural gas, helping to prompt it to seek 13% rate increases. The cost to build a power plant has also gone up, more than doubling since 2000. South Carolina Electric & Gas wants to boost rates 37% by 2019 to cover its share of two nuclear reactors costing $10 billion. Some utilities are seeking several increases. In New York City, Con Edison, which raised rates 4.7% in April, seeks increases of 5% in each of the next three years to fund $5.5 billion in equipment after a 2006 Queens blackout. That's on top of an anticipated 13% rate increase this summer for higher fuel charges. "We must make sure that our system has the highest reliability," says Con Ed spokesman Michael Clendenin. Queens Assemblyman Michael Gianaris says Con Ed wasted funds on new plants elsewhere and urges regulators to reject the proposal. "I say not one penny more until reforms are done," he says. Expect bigger rate shocks if federal legislation, anticipated by 2010, passes and forces coal-fired generators to pay fees to emit global-warming gases. American Electric Power, the largest coal-fired generator, will have to raise rates 115% to pay higher fuel costs, build new plants and recover globalwarming fees, says Hugh Wynne of Bernstein Research. But Wynne says regulators could temper increases by trimming profits.

Electricity continues to eat out of consumers’ pocketbooks
Progressive Newswire, “Consumer Groups: Federal Limits On Electricity Prices Unlikely To Offer Relief To Consumers”, http://www.commondreams.org/news2001/0618-08.htm, June 18, 2008
WASHINGTON - June 18 - As the federal government prepares to extend limits on electricity prices in California and other Western states, consumer groups said the government's actions are not likely to offer much relief to Western consumers. The Federal Energy Regulatory Commission (FERC) is scheduled to meet this afternoon to consider further steps to monitor the Western electricity problem. But Consumers Union (CU) and Consumer Federation of America (CFA) said the commission's plans will reportedly fall far short of what is needed to keep electricity prices at a reasonable level. "The companies that generate electricity have been holding back supply in order to run up prices and make big profits," said Adam Goldberg, policy analyst at CU. "The federal government has refused to step in and stop this price gouging. If FERC proceeds as expected today, it will continue to let companies get away with price gouging, and consumers will continue to pay outrageous prices." FERC is widely expected to extend current price limits--now in effect only during power emergencies in California--to 24 hours a day, seven days a week in states throughout the West. But it is clear that the commission will not fix other systemic problems that have cost consumers billions of dollars. "The changes FERC announces today will have some impact - instead of being overcharged by $50 billion a year for electricity, consumers will now only be overcharged $25 billion," said Dr. Mark Cooper, CFA's Director of Research. "Is that an improvement? Yes. Is that acceptable? No." Consumers Union filed a petition at FERC on June 15 to ask that it impose cost-based electricity rates for the western United States. "FERC should set prices based on each generator's cost of producing power," said Goldberg. "That's the way it works in most industries. Why should electricity be any different? FERC has been content to take baby steps in response to runaway prices in California, but consumers can't keep waiting for this agency to walk while runaway prices keep eating at their pocketbooks. That's why we filed the petition."

Consumer sentiment is severely deteriorating due to higher energy prices
International Council of Shopping Centers, global trade association of the shopping center industry, “Beyond gasoline: Prices surge for oil-based goods”, Lexis, June 5, 2008
But the International Council of Shopping Centers is reaching different conclusions. On Wednesday, it reported no week-to-week increase in sales and it proclaimed in a press release that consumers were not in the mood to spend. How much gasoline prices rise may have an effect on consumer confidence. "A change of 10 cents a gallon either up or down won't make much of a difference in confidence levels," says Lynn Franco, director of the Conference Board's Consumer Research Center in New York. "Following hurricane Katrina, some gasoline prices went up to $3.50 a gallon, and we had lines at gas stations. So there was much greater apprehension." But Mr. Jacobe says his surveys are starting to show a sharp deterioration in consumer confidence. "It's down considerably from the first week of January," he says.

15

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Consumer Spending key to the Econ
Decreased consumer spending affects the whole economy including taking a toll on the stock market and increasing inflation The Globe and Mail August 30, 2006
“U.S. consumer fears take toll on the markets”, Lexis,

For years, the U.S. consumer was the superhero of the economy, able to withstand soaring energy prices, inflation scares and debt levels that would crush mere mortals. But suddenly, Captain Credit is looking less than invincible. And that's threatening to put the kibosh on a nascent stock market rally, as fears mount that the consumer spending binge that propped up the U.S. economy may finally be coming to an end. Yesterday, even as the price of crude oil closed below $70 (U.S.) a barrel for the first time since June, the latest read on the consumer's mood caused tremors on Wall Street. The Conference Board's index of consumer confidence took its biggest dive in nine months, plunging to 99.6 in August from 107 in July. Lofty energy prices, slowing job growth and, perhaps most important, the bursting of the housing bubble all likely contributed to the skid in confidence. "U.S. consumers rightly feel that they are in a tough spot. As gasoline prices remain high and the housing market crumbles, optimism is fading," said BMO Nesbitt Burns economic analyst Benjamin Reitzes. Compounding the problem, despite feeling less confident about the economy, consumers' expectations for inflation rose. This is the worst of both worlds - an economy that is slowing but which is experiencing a buildup in inflation.

Decreased consumer spending affects the whole economy including taking a toll on the stock market and increasing inflation
The Globe and Mail, “U.S. consumer fears take toll on the markets”, Lexis, August 30, 2006
For years, the U.S. consumer was the superhero of the economy, able to withstand soaring energy prices, inflation scares and debt levels that would crush mere mortals. But suddenly, Captain Credit is looking less than invincible. And that's threatening to put the kibosh on a nascent stock market rally, as fears mount that the consumer spending binge that propped up the U.S. economy may finally be coming to an end. Yesterday, even as the price of crude oil closed below $70 (U.S.) a barrel for the first time since June, the latest read on the consumer's mood caused tremors on Wall Street. The Conference Board's index of consumer confidence took its biggest dive in nine months, plunging to 99.6 in August from 107 in July. Lofty energy prices, slowing job growth and, perhaps most important, the bursting of the housing bubble all likely contributed to the skid in confidence. "U.S. consumers rightly feel that they are in a tough spot. As gasoline prices remain high and the housing market crumbles, optimism is fading," said BMO Nesbitt Burns economic analyst Benjamin Reitzes. Compounding the problem, despite feeling less confident about the economy, consumers' expectations for inflation rose. This is the worst of both worlds - an economy that is slowing but which is experiencing a buildup in inflation.

US consumers are key to the global economy and affects emerging markets like Brazil, Russia, India, and China
Birmingham Post, “The West's central banks will all cut interest rates; GROWTH”, Lexis, April 3, 2008
Fitch Ratings yesterday said housing and consumer-led downturns in advanced economies will drive world growth to its lowest level in five years in 2008 - despite robust growth in Brazil, Russia, India and China (BRIC) and other emerging markets. Measured at market exchange rates, growth will be 2.6 per cent, the rating agency said. Fitch predicted GDP growth at one per cent in the United States; 1.3 per cent in Japan; 1.4 per cent in the United Kingdom and 1.7 per cent in the Eurozone. With the US slipping into recession, Fitch projected 1.3 per cent growth in the major advanced economies (MAEs), comprising the United States, Eurozone, Japan and the United Kingdom, no higher than in 2001. Deteriorating prospects for the US consumer and a deeper and a more prolonged than expected slump in the US housing market lie at the heart of the weaker outlook, Fitch said. Given the importance of US consumers

as a source of final demand for the rest of the world, this will have sizeable knock-on effects elsewhere through trade linkages, including in emerging markets, Fitch said. The evidence is still tentative on the macroeconomic fall-out from the credit crunch - credit growth has remained quite robust in the MAEs - but the deterioration in consumer confidence has become clearer, it said. In the US, UK, France and Spain, confidence is at its lowest level
since at least the early to mid-90s, pointing to concerns about the outlook for income and jobs. The ability of policymakers to offset this shock is being constrained by increases in inflation related to a surge in global energy prices since late last year and high rates of world food price growth. Fitch predicted inflation in the MAEs to average just under three per cent in 2008, while global CPI inflation is projected at 3.7 per cent. The rise in inflation is giving pause to central banks in the MAEs where the slowdown in growth is not yet self-evident. However, as weaker activity manifests itself more firmly through the course of the year, Fitch expects further significant cuts in rates, including by the Federal Reserve, Bank of England and the European Central Bank. However, in emerging

markets, growth dynamics and the lasting effects from food and energy price shocks are creating an imperative to tighten policy to avoid inflation.

16

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

IL – energy prices key to economy
High energy prices have a ripple effect throughout the world economy Mark Zandy, chief economist for Economy-Dot-Com, an online international economic consulting service, “Gasoline Prices/ World Economy Q&A”, June 1, 2004
INTRO: Rising fuel prices in the United States are not simply a problem for American drivers. They could have a ripple effect throughout the entire world economy. How? VOA's Barbara Klein spoke with Mark Zandy, chief econo-mist for Economy-DotCom, an online international economic consulting service. She asked him why high gasoline prices in the United States would have such a widespread effect? DALET: ZANDY/KLEIN INTERVIEW VO 4: 23 (Zandy) "Because it has a very debilitating effect on the U-S economy. To just give you a sense of the magnitude: every penny increase in a gallon of gasoline takes a billion dollars out of the pockets of U-S consumers. And if U-S consumers have to spend more filling up their gasoline tank, they have less to spend on everything else, including products that are produced overseas.

17

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

US econ key to Globe
US economic collapse will destroy the global economy Mead 04 – Senior Fellow at Council on Foreign Relations
[Walter Russell, “America's STICKY Power,” Foreign Policy, Mar/Apr, Proquest] Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States-government and private bonds, direct and portfolio private investments-more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse

of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes a strength, not a
weakness, and other countries fear to break with the United States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a That is sticky power with a vengeance.

collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world.

18

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Economy Impacts
Economic collapse will cause extinction Bearden 00, Director of Association of Distinguished American Scientists
[T. E., “The Unnecessary Energy Crisis: How to Solve It Quickly,” Space Energy Access Systems, http://www.seaspower.com/EnergyCrisis-Bearden.htm]

History bears out that desperate nations take desperate actions. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China — whose long-range nuclear missiles (some) can reach the United States — attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stress conditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch on perception of preparations by one's adversary. The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate full-bore preemptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself. The resulting great Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at least for many decades.

US economic collapse will ensure a US-China war Mead 04 – Senior Fellow at Council on Foreign Relations
[Walter Russell, “America's STICKY Power,” Foreign Policy, Mar/Apr, Proquest] Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States-government and private bonds, direct and portfolio private investments-more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse

of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes a strength, not a
weakness, and other countries fear to break with the United States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance. The United States' global economic might is therefore not simply, to use Nye's formulations, hard power that compels others or soft power that attracts the rest of the world. Certainly, the

U.S. economic system provides the United States with the prosperity needed to underwrite its security strategy, but it also encourages other countries to accept U.S. leadership. U.S. economic might is sticky power. How will sticky power help
the United States address today's challenges? One pressing need is to ensure that Iraq's econome reconstruction integrates the nation more firmly in the global economy. Countries with open economies develop powerful trade-oriented businesses; the leaders of these businesses can promote economic policies that respect property rights, democracy, and the rule of law. Such leaders also lobby governments to avoid the isolation that characterized Iraq and Libya under economic sanctions. And looking beyond Iraq, the allure of access to Western capital and global markets is one of the few forces protecting the rule of law from even further erosion in Russia. China's

rise to global prominence will offer a key test case for sticky power. As China develops economically, it should gain wealth that could support a military rivaling that of the United States; China is also gaining political influence in the world. Some analysts in both China and the United States believe that the laws of history mean that Chinese power will someday clash with the reigning U.S. power. Sticky power offers a way out. China benefits from participating in the U.S. economic system and integrating itself into the global economy. Between 1970 and 2003, China's gross domestic product grew from an estimated $106 billion to more than $1.3 trillion. By 2003, an estimated $450 billion of foreign money had flowed into the Chinese economy. Moreover, China is becoming increasingly dependent on both imports and exports to keep its economy (and its military machine) going. Hostilities between the United States and China would cripple China's industry, and cut off supplies of oil and other key commodities. Sticky power works both ways, though. If China cannot afford war with the United States, the United States will have an increasingly hard time breaking off commercial relations with China. In an era of weapons of mass destruction, this mutual dependence is probably good for both sides. Sticky power did not prevent World War I, but economic interdependence runs deeper now; as a result, the "inevitable" U.S.-Chinese conflict is less likely to occur.

19

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Non-Unique – Prices High
Electricity prices will increase- growing demand
Market Watch, 7/10/07 (Jim Jelter, “Commentary: The urgent need to upgrade the grid”, http://www.marketwatch.com/news/story/its-alive-urgent-needupgrade/story.aspx?guid=%7B10F3E997-694B-447E-AF2C-58BB3211B525%7D&dist=hpts)

Electricity demand is growing at about 1% a year, according to the U.S. Energy Department, and is likely to hold that pace despite a sluggish economy. That's because of demographic growth -- more people -- and the explosion in the numbers and types of electronic devices now considered essential. Meeting that demand focuses inevitably on power generation. But power is useless without the vast transmission networks that carry it to end-users. Those
networks draw on 100-year-old technology and high-voltage lines, most of which were installed in the 1950s and '60s.

Electricity prices will rise
iStockAnalyst, 7/10/08 (Amos Maki, “MLGW Warns Bills Could Grow 30% -- Utility Telling Its Customers to Expect Natural Gas Cost to Soar Along With
Electricity”, http://www.istockanalyst.com/article/viewiStockNews+articleid_2387233&title=MLGW_Warns_Bills_Could.html)

Consumers already feeling the pinch at the gas pump could be in store for another round of sticker shock when they get their utility bills in late summer
and fall. Memphis, Light, Gas & Water Division officials say residential customers could see a 30 percent spike in the cost of natural gas this fall. That's in addition

to electricity rates that have jumped 13.5 percent over last year's rates.
"What you see going on at the fuel pump is happening across all energy sectors, so we're seeing it in natural gas and we're also seeing it in electricity," said Laura Campbell, assistant manager of energy resources at MLGW and an energy adviser to the Commodity Futures Trading Commission. "Across the board, all these fuels have increased dramatically."

As residents enter the peak cooling season in the Mid-South, their utility bills will show the higher prices for electricity more dramatically. The same will happen for natural gas during the peak heating season this fall and winter.
"It all comes down to supply and demand," Campbell said. "Demand continues growing at a steady rate and any change to the supply picture really affects price."

Electricity prices are increasing and are expected to go up – prefer predictive evidence Maki July 10 (Amos Maki, July 10 2008, iStockAnalyst, MLGW Warns Bills Could Grow 30% -- Utility Telling Its Customers to Expect Natural Gas
Cost to Soar Along With Electricity,” http://www.istockanalyst.com/article/viewiStockNews+articleid_2387233&title=MLGW_Warns_Bills_Could.html) Consumers already feeling the pinch at the gas pump could be in store for another round of sticker shock when they get their utility bills in late summer and fall. Memphis, Light, Gas & Water Division officials say residential customers could see a 30 percent spike in the cost of natural gas this

fall. That's in addition to electricity rates that have jumped 13.5 percent over last year's rates. "What you see going on at the fuel pump is happening across all energy sectors, so we're seeing it in natural gas and we're also seeing it in electricity," said Laura Campbell, assistant manager of energy resources at MLGW and an energy adviser to the Commodity Futures Trading Commission. "Across the board, all these fuels have increased dramatically." As residents enter the peak cooling season in the Mid-South, their utility bills will show the higher prices for electricity more dramatically. The same will happen for natural gas during the peak heating season this fall and winter. "It all comes down to supply and demand," Campbell said. "Demand continues growing at a steady rate and any change to the supply picture really affects price." The Tennessee Valley Authority, which supplies MLGW with electricity, increased its wholesale fuel costs by 2.1percent July 1. The fuel cost adjustment came four months after the TVA passed a 7 percent base rate increase for electricity. MLGW is required by its contract with TVA to pass along increases or decreases in power costs to retail customers. In January,
MLGW implemented a 6.7 percent gas rate increase and a 15 percent water rate hike, raising average monthly bills about $5.61 for gas and $1.71 for water. Natural gas futures have gone up 82 percent since Jan. 1 and finished last week at their highest point in more than 2 1/2 years, according to the U.S. Energy Information Administration. Also, residential electricity prices are projected to increase by an annual average of about 5.2 percent in 2008 and 9.8 percent in 2009 compared with an increase of 2.2 percent in 2007 . The "typical" MLGW customer paid $158 for natural gas in January 2008. With the predicted 30 percent increase, that same customer would likely pay $195 in January 2009. There are several factors contributing to the soaring prices. Campbell said consumers and utilities aren't experiencing the typical early summer dip in natural gas prices - after the high demand during the winter season and before the midsummer spike when utilities fire up more natural gas-powered plants to handle cooling demand. "There just wasn't the normal dip in early summer," she said. "It has just continued to increase without the usual seasonal cycles." In addition, pipeline capacity that delivers the natural gas is extremely tight and results in higher prices. Speculation and rising oil prices also play a role. Campbell said MLGW customers should use the summer months to weatherize their home by sealing leaks, adding insulation and taking other steps to improve energy efficiency. "People are making lifestyle changes as it relates to their car, and what they need to realize is they need to make lifestyle changes as it relates to their energy use and utilities at home," she said. "People have a lot more control than I think they realize." The rising energy costs are hardest on those who can least afford it. Metropolitan Inter-Faith Association vice president of public relations Elizabeth Garrett said rising fuel prices have already resulted in a 30 percent increase in requests for food vouchers as individuals are forced to choose between filling their gas tanks or their refrigerators. Garrett said things could get much

20

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

worse if utility bills continue to escalate. "People that are walking in the door right now are coming from bills two months ago," she said. "We don't have a crystal
ball, but I certainly expect we will have increased demand." Memphis resident Dorothy Hayes fears rising utility costs could be the last straw for some. "Everything is going up, gas and food, and there are a lot of older people who can't afford it," said Hayes, standing outside the Downtown MLGW payment center at Main and Pontotoc. "I don't think its fair because everything is so high."

21

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Non-Unique – Prices high
Electricity prices are going up
Reuters, 7/9/08 (“U.S. consumers face higher electricity prices-EIA”, http://in.reuters.com/article/oilRpt/idINN0819376520080708)
WASHINGTON, July 8 (Reuters) - Americans, already hit by surging gasoline prices, will also face rising electricity costs this year and next, the U.S. top energy forecasting agency said on Tuesday.

Higher costs for natural gas to fuel power plants will be passed on to consumers, causing residential electricity prices to climb by 5.2 percent this year and 9.8 percent in 2009, the Energy Information Administration said in its new monthly energy forecast.

Non-unique: electricity prices have been rising rapidly
Tallahassee July 10. Moline, Barry. "Fuel Costs Affect Your Utilities, Too." Tallahassee. 10 July 2008. 10 July 2008
<http://www.tallahassee.com/apps/pbcs.dll/article?AID=/20080710/OPINION05/807100310/1006/OPINION>.

The increase in gasoline price is only part of the story. Electricity costs have also spiked because of rising fuel costs. Coal, an abundant fuel source in our country and a fuel for which cost has been low and stable for decades, has doubled in price just this past year. Since 1999, the cost of natural gas has also skyrocketed, by more than 400 percent.

22

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Renewables Stabilize Prices
Renewables are comparatively better for electricity prices and generation than fossil fuels AWEA 07
[American Wind Energy Association, AWEA is a national trade association representing wind power project developers, equipment suppliers, services providers, parts manufacturers, utilities, researchers, and others involved in the wind industry - one of the world's fastest growing energy industries; Protection Against Electricity Price Instability, July 1, http://www.awea.org/greenpower/gp_why3.html]

Purchasing electricity generated by renewable energy resources can provide a financial hedge against unstable or rising fossil fuel prices. We have seen several occasions in the past 20 years when wars or economic booms have caused fuel prices to change sharply, making it difficult for businesses to predict or control operating costs. Wind, geothermal, hydro and solar energy in particular are not subject to fuel costs at all. And none of these indigenous resources are at risk of supply interruptions from external political turmoil. Electricity generated by these renewable resources can offer a longer term fixed price, while regulated rates and contracts for electricity generated by fossil fuels usually contain a fuel price adjustment clause, or are only short term contracts. Electricity from fossil fuels may be able to offer fixed prices for longer terms only through financial hedges purchased in electricity futures markets.

Turn- Renewables help stabilize electricity prices UCS 07
[Union of Concerned Scientists, The Union of Concerned Scientists is the leading science-based nonprofit working for a healthy environment and a safer world, Cashing In on Clean Energy, August, http://www.ucsusa.org/clean_energy/clean_energy_policies/cashing-in.html]

America’s current energy system is dominated by fossil fuels, which pose serious threats to our health and environment and leave us vulnerable to price spikes and supply shortages. With the threat of global warming becoming increasingly urgent, we must make responsible energy choices today that ensure a safe, reliable power supply and a healthy environment for future generations. Fortunately, there are practical and affordable ways to achieve this goal. Homegrown renewable energy resources—such as wind, solar, bioenergy, and geothermal—can help reduce our dependence on polluting fossil fuels. These clean energy sources can also help stabilize energy prices, stimulate the development of innovative new technology, and create high-quality jobs and other economic benefits.

The plan is imperative to overcome squo electricity fallouts Penner 01
[Dr. Peter S. Fox-Penner, Principal of The Brattle Group, Inc., Before the Senate Committee on the Budget January 30, 2001; http://budget.senate.gov/democratic/testimony/2001/foxpenner_econsechrng013001.pdf]

A number of added policy responses are needed to address our energy problems, but from the fiscal standpoint it will remain important to continue investing in energy efficiency programs and energy supply R&D, particularly renewable and distributed generation and advanced vehicle research. With respect to these crucial federal investments, sound budgeting becomes sound policy. In the long run, there is no reason why the United States cannot achieve a robust, environmentally sustainable, low-cost energy industry. Indeed, the technological prospects have never been better. 5 For the next few years, however, high and volatile prices and supply uncertainties will cast a shadow over the economy, heightening the need for energy assistance and clean technology investments.

23

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Renewables Stabilize Prices
Renewables help the economy and shield consumers from price spikes Environment California 03
[government sponsored environment site in California, Energy Reports, Apr 16, http://www.environmentcalifornia.org/reports/energy/energy-program-reports/generating-solutionshow-clean-renewable-energy-is-boosting-local-economies-and-saving-consumers-money]

Renewable energy also is the best economic choice. Increasing investment in renewable energy and energy efficiency programs will boost local economies and save consumers money, all while protecting the environment. Renewable energy sources also are "homegrown" energy sources that keep money spent on energy in the local economy. Several studies have shown that investment in renewable energy creates more jobs than business-as-usual and sparks economic development in local—particularly rural— economies by generating new sources of revenue for landowners, school districts and local government. In addition, diversifying the electricity mix to include renewable energy shields consumers from price spikes in the volatile fossil fuels market.

Prices will inevitably decrease EIA 02 subset of DOE,
[Electricity Prices in a Competitive Environment , Oct 21, http://www.eia.doe.gov/cneaf/electricity/eu_comprice/eu_comprice_sum.html]

As the need for new capacity increases, competitive prices will rise until capacity expansion becomes profitable. Therefore, the prices projected in the Intense Competition Case are not considered to be sustainable over the long term.

24

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Spikes don’t hurt the Econ
Ma3rkets will self-correct- no risk of any damage to the economy Michaels and Ellig 98
[Robert J. Michaels is professor of economics at California State University, Fullerton, and adjunct scholar at the Cato Institute. Jerry Ellig is senior research fellow at the Mercatus Center, George Mason University., Electricity: Price Spikes by Design?, summer, http://www.cato.org/pubs/regulation/regv22n2/pricespikes.pdf]

We believe that the evidence suggests the wholesale electricity market operated with surprising efficiency under difficult circumstances and that regulators should not take the price spikes as evidence of the need for price controls or other guidance. Remarkably, both the Federal Energy Regulatory Commission (ferc) and commissions in the affected states largely agree with us. Unlike their counterparts in the Northeast and West, self-sufficient midwestern utilities traditionally have relied sparingly on market purchases of power. In the extreme conditions of last summer, the market flourished and helped keep the lights on. The reliable supply of electricity depends on complex coordinated networks. The United States is learning that markets can perform much of the necessary coordination.

Spikes don’t change anything and the markets behave normally regardless Michaels and Ellig 98
[Robert J. Michaels is professor of economics at California State University, Fullerton, and adjunct scholar at the Cato Institute. Jerry Ellig is senior research fellow at the Mercatus Center, George Mason University., Electricity: Price Spikes by Design?, summer, http://www.cato.org/pubs/regulation/regv22n2/pricespikes.pdf]

Within the spike days, prices behaved competitively. Low demand and plentiful transmission in off-peak hours produced prices below $15/MWh on the spike days, the same as before and after the spike days. Onpeak, a confidential survey of power marketers by Tabors Caramanis and Associates (tca) showed a normal intraday pattern, rising with the sun and cresting prior to the late afternoon peak for deliveries to be made in the following hours. In a given hour, the risks of shortfalls (which can cause systemwide outages) and the uncertainty about transmission produced large differences between reported high and low prices. Both high and low prices, however, showed the same pattern over the day.

Electricity price spikes are absorbed by the economy and have little chance of allowing the prices of energy to soar Poole 07 President, Federal Reserve Bank of St. Louis
[William, Energy and the U.S. Macro Economy, July 24, http://www.stlouisfed.org/news/speeches/2007/07_24_07.html]

In contrast, the real price of coal fell steadily from 1976 to 2003 and has since risen only slightly. In 2006, the real price of coal was less than half of its 1982-4 value. The real retail price of gasoline has increased continuously since 2003, but in 2006 exceeded the average price of 1982-4 by only 12 percent. The relative price in 2006 is roughly 10 percent below its historical high reached in 1981. The real price of electricity fell by about 35 percent from the early 1980s until 1999, leveled off, and has increased about 12 percent since 2003. Nevertheless electricity remains 23 percent cheaper in real terms than it was on average during 1982-4.

As painful as recent energy price increases have been, this historical perspective helps us to understand why the economy has been able to absorb the price increases with little effect on the aggregate economy. Perhaps the most direct way to understand the impact of energy
prices on consumers is to examine the fraction of household budgets devoted to energy. After 1981, the share of consumer expenditures on energy out of nominal disposable personal income trended downward, from a high of over 8 percent to about 4.1 percent in 1998 (see Figure 6). Disposable personal income, by the way, is essentially all household income including transfers such as Social Security benefits less direct taxes, which are mostly income taxes. Real disposable personal income is the nominal or dollar amount adjusted for changes in the general price level. With the increase in energy prices documented in Figures 2 and 3, the energy share of disposable personal income rose from 4.1 percent in 1998 to almost 5.8 percent in 2006. This increase simply returns the share to about its 1985 level. It is important to recognize, however, that the increase

in energy prices, though of limited impact in the aggregate, has forced difficult choices on lower-income households for whom the burden has been much higher as a proportion of income.
The recent price increases are having the expected negative impact on the quantity of energy consumed, relative to total goods and services consumed, but the total amount spent on energy has nevertheless increased. The increase in the energy share of nominal disposable personal income reflects the inelastic short-run demand for energy by consumers. Put another way, as energy prices have surged, the quantity of energy consumed has grown more slowly than real

disposable personal income but not slowly enough, given the price increases, to prevent the amount spent on energy from rising significantly.

25

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Spikes Inevitable
Volatility has emerged because of flawed structure and lack of information on consumption Journal of Property Management 01
[A periodical from Chicago, Illinois on property management., A new energy economy: Valuing information, Mar/Apr, http://findarticles.com/p/articles/mi_qa5361/is_200103/ai_n21470037?tag=content;col1]

Market volatility. A distressingly

high degree of volatility has emerged in the commodity markets in response to growing regional disparities in supply and demand for both electricity and natural gas. In the case of California, volatility and concern has risen as a result of an incomplete and/or flawed deregulatory structure. Marketers and utilities attempt to protect themselves from this volatility through risk management (hedging) and other forward-pricing strategies and by offering their customers value-- added services and products. This is why many utility companies now offering telecom and broadband services, energy audits and conservation incentives, customer assistance
centers, and electronic bill presentation and payment.

If they possess the necessary information about their consumption, energy users can dampen some of their exposure to price volatility by better defining supply contract terms and by implementing load-- management strategies, such as demand aggregation (buying
pools) or onsite (distributed) generation.

Natural gas prices make electricity price increases inevitable Houston Chronicle 5/31 [Texas: Electricity price flies off the grid, http://www.energybulletin.net/node/45318]
The price

of electricity already was rising toward records because of climbing natural gas prices. Now it's getting an extra boost from unexpected spikes in the wholesale markets where electricity is bought and sold in bulk. For several days this month and in April, the price of power briefly spiked in the so-called balancing market where the state's grid operator buys electricity at 15-minute intervals to keep supply and demand in balance.
Those prices didn't show up directly on any homeowners' bills, but they may have helped push two smaller electric retailers out of business, dumping almost 25,000 customers back into the market.

Price spikes caused by 3 things the plan does not influence Megawatt Daily 04 [subset of McGraw ill, reports on electricity news, ERCOT: Spikes caused by outages, constraints; May 13, lexis]
The price spikes were caused by "transmission outages, services and maintenance creating a little congestion," a PUC spokesman said, adding the jump in prices was "mainly a result of the shoulder season." That explanation is similar to the one offered by ERCOT officials shortly after the real-time prices climbed. The PUC said its market oversight division would investigate the higher prices shortly after the spike. The spokesman said the market oversight division is continuing to investigate. The state's Sunset Advisory Commission staff also has called for ERCOT to contract with a private, independent company to monitor the wholesale electricity market. PUC and ERCOT officials have said they do not object to the recommendation.

Price spikes caused by heavy use of AC in hot weather Associated Press 06 [Snowy privatisation won't increase prices, Apr 16, lexis]
"So it's in Snowy Hydro's benefit to drive prices high so that people have to protect themselves against that volatility and they are one of the few companies that can actually provide that protection," he told the Nine Network. But Mr Charlton said prices were set by demand and price spikes were caused by the heavy use of air conditioners when there was hot weather. "We cannot drive up the price, the price is determined by the demand," he told the Nine Network. "It's in our best interests to come in and generate when those prices spike and drop the prices back down because we are paying out on our derivative contracts when those prices are above the strike price or the swap price." Mr Charlton said Snowy Hydro was not the only supplier and if it held back supply to meet demand others would fill the gap. If the newly privatised company did try to manipulate price spikes in the short term, it would soon lose business to other peak electricity producers.

26

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Spikes won’t happen
Government will issue caps to limit the impact of energy price spikes Bunn and Karakatsani 03 [Corresponding author: Professor Derek W. Bunn, London Business School , professors @ London Business School,
Forecasting Electricity Prices, http://www.london.edu/assets/documents/PDF/2.3.4.12.1_Karakatsani_and_Bunn_2003_FEP_pdf5.pdf] Finally, although

the imperfections of electricity market create a richness of structure for modellers, and most of these economic, technical and behavioural influences can be captured by a mixture of econometric and stochastic specifications, the political sensitivity of electricity should not be underestimated. Even though the markets have been liberalised, regulatory interference is never far away (see Bower, 2003), and high prices only have to persist for a few months before price caps emerge, as indeed they have in the Britain, Spain and California. Similarly social, industrial and environmental polices are always on the horizon, as we have seen recently, with carbon taxes and renewable credits. It would appear prudent, therefore, that an analysis of institutional intent should provide the very basic set of background assumptions, followed
by a strategic analysis of the major players, before a dynamic structural and stochastic specification of the pricing model is attempted. From a forecasting perspective, this will require the time series and econometric specifications to be consistent with higher level political and strategic models, which will inevitably be of quite a different, more subjective character.

That’s especially true today- companies are capping bills to reduce prices specifically for this year
Daily Record 5/22 [Baltimore newspaper, Come June, all businesses in Md. will pay more for electricity,
http://findarticles.com/p/articles/mi_qn4183/is_20080522/ai_n25504257?tag=content;col1]

The number of businesses that bid for their electricity every quarter will swell on June 1, along with the bills of all non- residential customers.

Last week, the Maryland Public Service Commission announced that to avoid price spikes for those businesses transitioning from "Type I" to "Type II" customers, their bills would be capped from June through August at no more than 15 percent higher than what they paid in 2007. Instead of sticking utilities with the cost of capping the bills, the PSC said all other non-residential customers would pay the balance.

Energy Star prevents prices from getting out of hand
Edison Foundation 06 [The Edison Foundation is a nonprofit organization dedicated to bringing the benefits of electricity to families, businesses, and
industries worldwide, Why Are Electricity Prices Increasing?, June, http://www.eei.org/industry_issues/electricity_policy/state_and_local_policies/rising_electricity_costs/Brattle_Report.pdf]

Another federal initiative that is helping to reduce energy and electricity consumption is the ENERGY STAR program. The “ENERGY STAR” label identifies products, practices, services, homes, and buildings that meet government guidelines for energy efficiency. Introduced by the U.S. Environmental Protection Agency (EPA) in 1992 for energy-efficient computers, the ENERGY STAR program has become a broad platform for promoting energy efficiency across the residential, commercial, and industrial sectors. The program has grown to include efficient new homes that became eligible for the ENERGY STAR label in 1995 and more than 40 product categories for homes and businesses, such as clothes washers, TVs, and refrigerators.37 While the ENERGY STAR initiatives are separate from the utility DSM programs described
earlier, EPA in some cases partners with utilities (as well as home builders, manufacturers, and others who play a key role in getting energy-efficient equipment into the market). EPA estimates that the ENERGY STAR million vehicles.38

programs saved a total of 126 billion kWh of energy and 25 GW of peak power in 2004—the amount of peak power required for about 25 million homes. These programs also prevented the greenhouse gas emissions equivalent to those from 20

States have developed means to stop excessive prices AGA 08 [American gas Association, The Impact of Industry Restructuring on Electricity Prices, 7/5,
http://www.aga.org/Research/studies/impact_industry.htm.htm]

Under the expected restructuring of the U.S. electric utility industry, electricity prices are forecast to fall by 14 percent in real terms
between 1996 and 2015. Real price changes will range from declines exceeding 25 percent in the highest cost states or regions to flat to rising prices in the lowest cost states or regions. Real price declines are forecast at 26 percent for the industrial sector, versus about 9-10 percent for the residential and commercial sectors.

To minimize or defer real price increases, especially for residential and commercial ratepayers, the states with the lowest costs will elect not to allow retail access.

27

Electricity Prices Disad Aff & Neg
2005 and 2010)

Georgia Novice Packet

In the highest cost states, all of which allow retail access, price declines will be the greatest once stranded cost recovery ends (between

28

Electricity Prices Disad Aff & Neg

Georgia Novice Packet

Spikes won’t happen
DSM programs prevent electricity prices from soaring
Edison Foundation 06 [The Edison Foundation is a nonprofit organization dedicated to bringing the benefits of electricity to families, businesses, and
industries worldwide, Why Are Electricity Prices Increasing?, June, http://www.eei.org/industry_issues/electricity_policy/state_and_local_policies/rising_electricity_costs/Brattle_Report.pdf] EIA also collects data on the energy and demand savings achieved by utility DSM programs. These savings have been relatively consistent over the 1994 to 2004 period, which suggest that DSM programs initiated in the early 1990s have produced relatively consistent savings over the last 10 years. For example, EIA found that in 1994 DSM programs saved a total of 57,421 GWh of energy, which is equivalent to the annual output of seven large nuclear

units or the annual output of about 20 500-MW-generating units operating at a 66-percent capacity factor. In 2004, these programs saved 54,710 GWh of energy. DSM programs also reduce peak load. According to the EIA data, DSM programs have reduced peak load by at least 23 GW over the
1994 to 2004 period. Peak load reductions have been relatively consistent over this period, ranging from a low of 22.9 GW in 2000 to a high of 29.8 GW in 1996. (Peak demand savings will be more sensitive to weather than energy savings and therefore somewhat more likely to vary from year to year.) In 2004, peak load reductions were 23.5 GW, a significant savings—a typical new combustion turbine (CT) is about 100 MW, so existing DSM programs have displaced the need for more than 200 CTs nationwide. Approximately 60 percent (14.3 GW) of the demand reduction savings were achieved by energy-efficiency programs, with the remainder attained through load-management programs.

States have done measures to protect against spikes Greenwire 6/12 [news station, UTILITIES: Texas power price spikes undergo scrutiny, lexis]
Texas electric business.

grid operators are scrambling to fix the causes of a recent wholesale power market spike that put four electric retailers out of

New rules issued Monday are designed to give the Electric Reliability Council of Texas greater flexibility in how it handles power congestion. During an emergency meeting of the Public Utility Commission yesterday, officials described other causes of the spikes, including the way software systems calculate market prices. They said the software allowed the spikes because the cost of relieving congestion on the power lines created a "shadow price" -- meaning the spikes do not indicate scarcity of power in the markets but flaws in the rules used to run the markets. The balancing market sells power on 15-minute intervals to keep the system in balance at what was supposed to have been a cap of $2,250 per megawatt-hour. Prices typically average around $100 per megawatt-hour, but in May it spiked several times, hitting $4,000 one day.

There is no probability for sharp price increases and hydroelectric power prevents them anyway
Hutzler 02 [ACTING ADMINISTRATOR for ENERGY INFORMATION ADMINISTRATION, DEPARTMENT OF ENERGY, HEARING ON THE EFFECT OF THE ENRON BANKRUPTCY ON THE FUNCTIONING OF ENERGY MARKETS, Feb 13, http://www.eia.doe.gov/neic/speeches/hrtest020213/testim0213.htm]

Until the U.S. economy begins to recover in earnest and domestic fuel inventories are pared to more normal levels, the probability of sharp price runups is minimal. In addition to the demand and fuel cost factors that have reduced the level of electricity price volatility since last winter, there has been a significant number of new electric generating plants added to the U.S. inventory over the last year or so.
Current estimates are that there has been about a 73,500-megawatt (9.3-percent) increase in generating capacity between the end of 1999 and the beginning of 2002. Approximately 2,000 megawatts (3.9 percent) have been added in California. Furthermore, it is generally expected that a significant recovery in hydroelectric power availability on the West Coast is likely this year. Such a development would further reduce the likelihood of renewed pressure on electricity prices in the region regardless of the specific entities engaged in trading there.

29