Inflation
Some request inflation adjustment from wind power developers
Many of the wind projects were bid several years ago before the COVID-19 pandemic, Reynold explained. Since then, the costs of cement, steel and wind turbines have all increased.
How much additional funding each project has requested from the PSC depends on when the projects were originally bid.
“Ranging from 27% for some, all the way up to 70% for some other projects,” Reynolds said.
For land-based wind projects, the state estimates that the increases would translate into an additional cost to consumers of $1.57 per month.
Reynolds didn’t comment on the additional cost to consumers of offshore wind projects.
The PSC may rule on the inflation adjustment as early as Oct. 12. If the adjustments are approved, the additional funding will be triggered when the project reaches the construction stage.
“So, if the prices go back down, the inflation adjustment would be less,” Reynolds said.
If the PSC denies the inflation adjustment, Reynolds said the situation would be “bad."
“Both offshore wind projects, and the land-based wind and solar projects, have demonstrated that the prices have gone up for these projects. And so, they can’t get built at these prices,” she said.
The petitions cover about 90 renewable energy projects.
“A lot of them will get canceled,” Reynolds warned. “Some of them may successfully rebid.”
NPR
Gas Prices Push Up Inflation Rate – The New York Times
Federal Reserve officials are likely to remain wary about the outlook for inflation following a report released Wednesday: Overall price increases sped up because of a pop in gas prices in August, and a more closely watched index that strips out volatile food and fuel prices climbed at a faster monthly pace than expected.
The Consumer Price Index climbed 3.7 percent in the year through August, the report showed. That was both faster than the 3.2 percent July reading, and slightly quicker than the 3.6 percent that economists had expected.
Federal Funds Effective Rate
Data Source: Board of Governors of the Federal Reserve System (US), Federal Funds Effective Rate [FEDFUNDS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/FEDFUNDS, August 13, 2023.
Inflation Reduction Act didn’t contribute to lower inflation
Even President Joe Biden has some regrets about the name of the Inflation Reduction Act: As the giant law turns 1 on Wednesday, it's increasingly clear that immediately curbing prices wasn't the point.
While price increases have cooled over the past year — the inflation rate has dropped from 9% to 3.2% — most economists say little to none of the drop came from the law. What You Need To Know
Even President Joe Biden has some regrets about the name of the Inflation Reduction Act. “I wish I hadn’t called it that because it has less to do with reducing inflation than it has to do with providing alternatives that generate economic growth,” Biden said Thursday at a fundraiser in Utah
As the giant law turns 1 on Wednesday, it’s increasingly clear that immediately curbing prices wasn’t the point
Price increases have indeed cooled over the past year, with the inflation rate dropping from 9% to 3.2%
But economists say little to none of the drop came from the law. Harvard University economist Jason Furman says he can't “think of any mechanism” by which the law would have reduced inflation
“I can’t think of any mechanism by which it would have brought down inflation to date," said Harvard University economist Jason Furman, who added that the law could eventually help to lower electricity bills.
Alex Arnon, an economic and budget analyst for the University of Pennsylvania’s Penn Wharton Budget Model, offers a similar assessment.
“We can say with pretty strong confidence that it was mostly other factors that have brought inflation down,’’ he said. "The IRA has just not been a significant factor.’’
That shouldn't come as a surprise.
When the Inflation Reduction Act was proposed, the Congressional Budget Office said its impact on inflation would be “negligible."
So why the name? It may ultimately help to hold down prices in the future — and it fit the politics of the moment.