02.28.2010 - by Plug In America
Gas Prices More Volatile Than Electricity Rates

“In the Driver’s Seat” brings you news and commentary from Plug In America’s board and staff. We’re considering creating a guest blog as well, which would feature posts by a selection of Plug In America’s most active volunteers.

Over the next few weeks, I’ll be posting some samples of the kinds of posts that might appear on a guest blog. If you like them, leave a comment to let us know that you’d like to see a guest blog from Plug In America — and if you have a good idea for a name for the guest blog, post that too!

First up — some thoughts from Plug In America co-founder (and actress) Alexandra Paul:

Alexandra100 “In the middle of January the United States average price of gasoline jumped 8.6 cents per gallon from the week before, to $2.75. This is 97 cents a gallon more than the same time last year, despite 8.3 million more barrels of gasoline available nationally, and a lower demand overall!

Hmmm if I were the driver of a gasoline powered vehicle, the unpredictability of this would make me nervous. According to Fadel Gheit, senior oil analyst for Oppenheimer and Co., this is ‘a good example of prices disconnected from market fundamentals of supply and demand, as was the case 18 months ago when oil prices peaked above $147 a barrel.’

“Electricity rates fluctuate too, and it can be hard to understand why, so I would be disingenuous if I didn’t acknowledge that, as an electric vehicle (EV) driver who does not make my own solar power, I am vulnerable to the whims of my power provider, the L.A. Department of Water & Power (LADWP).

Certainly, the complexity of their bills irritates the heck out of me, and electricity prices do not stay the same. But my provider is local (so local, in fact, that I ran into LADWP general manager David Freeman in the airport recently), which means that, not only am I supporting a community company that buys energy from within the United States, I also have more of a say if I should be unhappy with some aspect of my electricity provider. In fact, I have shown up at their headquarters with other Plug In America activists when the LADWP wanted to cut its in-house plug- in fleet and I had the opportunity to be speak my peace directly to the LADWP board.

No transportation option is perfect, but a plug-in car gives drivers the option to power their vehiclesfrom their own solar panels, and therefore not be beholden to oil or electricity conglomerates. For those who don’t have rooftop panels, Plug In America is working towards a U.S. grid powered by renewable sources like wind and solar. Until then, electric utilities still provide a cleaner, domestic fuel than oil companies.”

Pictured: Alexandra Paul

4 comments on “Gas Prices More Volatile Than Electricity Rates”
  1. Randy says:

    Alexandra, the impact to your pocket book is even less than you indicate because an electric vehicle (EV) is approximately 4 times more efficient than an internal-combustion-engine (ICE) vehicle. This means that the fluctuation in the cost of electricity can be divided by 4 to get the real fluctuation to your pocket book. Case in point, my EV is getting over an equivalent of 100 MPG and my old gasoline car was getting 21 MPG, which is a factor of 5 times more efficient. ICE cars in fact are using one of the most expensive fuels, be it gasoline, diesel, or CNG, in one of the least efficient engines because 80% of the energy in gasoline never makes it to the wheels, it’s wasted mainly in heat generated by the combustion process. Add this to the fact that all ICEs and hydrogen fuel cells consume oxygen to run, which is what I and everyone else needs to live. I could go on-and-on about the benefits of EVs like less pollution, less global warming, less money sent over seas to countries that do not like us, and the use of solar panels on your house that take the fluctuation in the cost of electricity to zero, but I will stop here.

  2. Project Get Ready has built such a calculator http://projectgetready.com/js/tco.html . You can assess how much changes in gas price and electricity prices would affect your transportation costs if you had a plug in or ICE vehicle. You’re welcome to post your questions on that page. Great article!

  3. vfx says:

    It would be nice to see this by the numbers (for us geeks).

    That is, what percentage are the fluctuations?

    If gasoline goes from $2.00 to $4.00 in a year, a driver is now paying double for required travel. If the typically less fluctuating electricity goes from .9 cents to .12 cents then a person’s transportation budget is less affected.

    And isn’t electricity price tangentially tied to fuel that comes out of the ground. (like food, goods and services?)

    http://gasbuddy.com/gb_retail_price_chart.aspx
    http://www.data360.org/dataset.aspx?Data_Set_Id=634

  4. Paul Scott says:

    Alexandra makes a good point about how we have little control over what the oil companies do with the price of gas. She mentions how electricity rates can fluctuate, but that we have some control over that since we have access to those who make the decisions about rates. She’s right, of course, but it’s even better than that because state’s Public Utility Commissions are set up to control when and how much utilities can raise rates. In the case of Los Angeles DWP, they have their own “PUC” in the guise of the LA City Council who scrutinize rate increases carefully before allowing them. While not a perfect system, at least there is a great deal of local control, unlike the oil companies who will do whatever they like with the price of oil. And most of the money for oil leaves our country, a double whammy to our collective national security and economy.

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