Friday, April 8, 2011

Renewable energy bonds save Benicia money

by Kathy Kerridge

The Benicia Herald recently published a letter questioning the wisdom of spending $845,000 a year on renewable energy for a saving of $50,000 a year. He said it didn’t make sense. If those were the facts it wouldn’t. However, he left out the most important part of the equation.

The city through these projects will save 70% of its utility bill. That is not a trivial amount since the city spends $1.5 million a year on energy. What the city is doing is spending money to save $1,050,000 (70% of $1,500,000) per year in utility costs.

One way or the other we would be spending this money, either on utilities or on the bond. The difference between the cost of the bonds and the utility bill is where the $50,000 per year in savings is realized. This is a conservative figure.

This project also freezes 70% of Benicia’s energy bill. In these days of rapidly escalating costs I think that is the only sensible course of action. I don’t think anyone believes the cost of energy will be going down in the next 20 years in light of the increased demand from developing countries, the increasing costs of extracting fossil fuels, and our reliance for oil on unstable and often dictatorial governments.

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