KEYSTONE HEIGHTS -- Clay Electric’s members and electric utility consumers nationwide are facing the likelihood that electricity costs will go up because of an avalanche of federal regulations coming out of Washington, D.C.
"We believe our members deserve to know what’s coming," said Ricky Davis, Clay Electric’s general manager/CEO. "There’s a huge load of regulations aimed at fossil-fueled power generation being unleashed by Washington that will force electricity prices higher."
Since 2008, the U.S. Environmental Protection Agency (EPA) has been proposing and finalizing new regulations aimed at electric utilities at a greater rate than ever before experienced. Currently, fossil fuel-fired power plants are being targeted on all fronts - air, water, and waste - with more than a dozen regulations that could cost not just electric cooperatives, but the entire electric utility industry, billions of dollars and jeopardize reliability.
The Energy Information Administration asserts that coal and natural gas generate more than 65 percent of the electricity in the United States. Nonetheless, the Federal Energy Regulatory Commission has estimated that 40 gigawatts to 81 gigawatts of coal-fired capacity could be shut down as a result of the EPA’s rules. The U.S. Chamber of Commerce references estimates of up to 33 gigawatts of coal-fired generation being retired due to overly burdensome EPA regulations.
Since 1970, power plant emissions have continued to decrease in spite of a long-term growing demand for electricity. Nonetheless, the EPA is proposing that wholesale power generators do even more, without regard to the impacts on consumers’ power costs. For example, based on an economic analysis by the Electric Power Research Institute, if the EPA implements just one of its current proposed rules the potential cost to the coal-fired electric generation industry could be between $54.6 billion and $76.8 billion over a 20-year period. These costs are passed on to consumers in the form of higher electricity bills.
Clay Electric receives its power from Seminole Electric Cooperative (Seminole), a not-for-profit provider of wholesale electricity to 10 electric distribution cooperatives in Florida.
For years, Seminole has been working to protect the environment by investing in equipment that has considerably reduced its air emissions. When placed into operation in 1984, Seminole’s two 650-MW coal-based generating units were equipped with state-of-the-art pollution control equipment. In 2003, Seminole proactively installed new control equipment and upgraded the existing equipment. In total, Seminole’s coal-based generating units have more than $530 million of pollution control equipment; making it one of the cleanest coal-based power plants in the U.S. Seminole also recycles its generation byproducts, which helps minimize landfill disposal. Seminole also has one of the state’s largest renewable energy portfolios, which includes the use of biomass and landfill gas generation.
However, the EPA continues to march ahead with new rules that will adversely affect utilities like Seminole. In fact, several of the proposed regulations could result in Seminole’s coal-fired power plant being forced to shut down or install even more expensive control equipment. The imposition of such monumental regulations would stifle reliability and force the price of electricity much higher.
"The EPA has shown that it’s willing to put the cart before the horse at any cost, no matter how much it might hurt consumers in the near term," Davis said. "In this poor economy, we cannot afford such unnecessary, avoidable rules."
Davis encourages members of the cooperative who are concerned about EPA’s burdensome regulatory regime and its effects on the cost of power to consider contacting their legislators and ask them to protect affordable and reliable electricity.
On a positive note, Davis believes the United States will reduce its reliance on fossil fuels for power generation in the future as different and cost-effective generation technologies are developed.