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Will We Run Out of Power in 2015?

Will the United States have enough electric power to get us through next winter?

This may seem like an outlandish plot for an action movie, but it’s not so far-fetched.

You see, new regulations handed out by the Environmental Protection Agency (EPA) are forcing coal-fired power plants to close faster than they can be replaced with new, gas-fired generation.

In fact, the country’s largest electric grid operator, PJM Interconnection LLC, has voiced concern.

The company has even asked the Obama administration for permission to pay power plant owners to keep at least 2,000 megawatts of generating capacity in operation through next winter.

If the administration doesn’t do something, we could be facing some serious blackouts this time next year.

The Great Shutdown

This year PJM, which has 62,566 miles of high-voltage transmission lines serving 61 million customers in 13 Eastern states and the District of Columbia, says it’ll see a historic amount of electric generating resources retired – 11,769 megawatts to be exact.

A full 41% of PJM’s electricity is generated by coal, by the way.

In contrast, only about 3,800 megawatts of new generating capacity is expected to be added in 2015.

The grid operator went on to say that over the next two years, there will be more than 30 gigawatts of coal-fired power plants that will be forced into retirement by the EPA’s new Mercury and Air Toxics Standards (MATS).

According to the Institute for Energy Research (IER), there has been or will be about 72 gigawatts of generating capacity (94% of which is coal-fired) lost nationwide due to EPA regulations.

That is seven times the amount originally predicted by the EPA!

To put that into perspective, IER says that is enough electricity to power every home west of the Mississippi River, excluding Texas.

And, PJM isn’t the only company that’s worried. Many electric utilities have voiced concerns.

Electric Execs Worried Too

At the Edison Electric Institute’s 49th annual conference in November, the scheduled closures were a hot subject.

The CEO of Southern Company (SO), Thomas Fanning, said of following the government’s mandates, “I don’t think we have the ability to maintain a reliable system.”

Nick Akins, the CEO of American Electric Power (AEP), called the EPA’s timeline for emissions reduction “wishful thinking.” Akins is also the CEO who told Congress after the winter of 2014 that the nation “dodged a cannonball” during last winter’s polar vortex.

An internal analysis conducted by AEP showed that following the EPA’s plan to the letter may result in “cascading blackouts.”

Many neutral industry observers back up the claims of the power companies that there simply aren’t enough pipelines in many parts of the country to transport the natural gas needed to fuel the newly built gas-fired power plants.

Building new pipelines in the United States is also a major undertaking, due to environmental regulations and court challenges from environmental advocacy groups.

These new regulations are turning out to be a major headache for everyone in the sector. But how will it affect you and me?

Bills, Bills, Bills

Besides the possibilities of blackouts, electric consumers will feel the EPA regulations right where it hurts the most – their wallets.

Brattle Group, a consulting firm, forecasted that electricity prices could jump as much as 25%!

The main hit will be taken by consumers served by grids that rely a lot on coal-fired power. These grids are, of course, in the Northeast and Midwest.

The EPA says that a 25% rise in rates is a small cost to pay for the “huge benefits” to public health and a “better future” for our children.

I’ll leave that to our readers to decide.

And “the chase” continues,

Tim Maverick

Tim Maverick

, Senior Correspondent

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