It’s the transportation costs that get you.

Okay, now that we have cheap natural gas to produce electricity with and all of our appliances and lighting is becoming more and more efficient we don’t have to worry about electricity prices. Do we? Not so fast there, friend. While production costs for electricity are down and will probably drop more there is this little matter of getting that electricity to your home. It gets there on the grid and the grid is getting old.

Industry analysts estimate that approximately 50% of distribution poles are 30 to 50 years old, and near the end of their useful life. With 2.2 million distribution miles in North America, the annual replacement of 1% to 2% of distribution miles (22,000 to 44,000 miles), at a cost of $140,000 per mile, represents approximately $3 to $6 billion per year. It is important to note that these figures do not include upgrades or new mileage.

via The Perverse Economics of the Electric Grid – Forbes.

This is something that we’ve been talking about for years but just won’t do anything about it. Perhaps now that fuel costs are dropping the money might be there to upgrade the grid but not by reducing electricity costs to us and not without a lot of cooperation from all the public and private utilities that put power on the grid.

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