Dependability of U.S. Electrical Grid Deserves Greater Scrutiny
There are almost 320 million people in the United States. And they all depend on one thing in common every day—reliable, affordable electricity. Not only do Americans count on robust power generation to heat their homes, refrigerate their food, and supply clean drinking water, but the pricing for this electricity also affects costs for groceries, transit, and even household items like clothing and toothpaste.
Essentially, the health of the U.S. economy is intricately intertwined with the ongoing security and reliability of the nation’s power grid. While serving on the Missouri Public Service Commission, I considered it of paramount importance to protect this base load power—to “keep the lights on” for consumers, and at reasonable prices.
Recently, Energy Secretary Rick Perry announced a review of the stability of the nation’s power grid. And undoubtedly, he has these kinds of pricing concerns in mind for a planned study on whether “regulatory burdens” and “mandates and tax and subsidy policies” favoring renewable energy are now impacting overall energy costs.
This is a responsible step for the U.S. Department of Energy to take. But Secretary Perry’s announcement has stirred up controversy nevertheless. The nation’s wind and solar groups have expressed concern over Perry’s intent to conduct a thorough review of the cost-benefit ratios involved in power grid reliability. And with taxpayer-funded subsidies for renewable projects potentially under scrutiny, these groups very much want to rebut the notion that “renewable generation is responsible for the retirement of coal.”
Safeguarding the security of America’s power grid shouldn’t be held captive to partisan wrangling, though. Especially when the impact of recent regulations have been undeniably damaging to base load power plants that are the mainstay of the nation’s power grid.
Unfortunately, most Americans are likely unaware of the impact that recent federal regulations have posed for both power grid reliability and overall energy costs. For example, less than 10 percent of voters could assess the scale of emissions reductions that have already been attained by coal-powered plants over the past 40 years. And President Obama’s plan to reduce power plant CO2 emissions would have prematurely forced 25 percent of the nation’s coal generation capacity off the electric grid—enough to power 24 million homes. This would have significantly impacted electricity prices throughout the nation.
Evidently though, any examination that underscores the impact of regulations on coal plants—and the subsidies parceled out to wind and solar projects—disturbs the renewable energy industry. In a recent letter to Secretary Perry, these wind and solar groups argued that they shouldn’t share the blame for coal’s woes which, they insist, merely stem from low natural gas prices.
But regulations have consequences. As Duke University’s Nicholas School has reported, recent government regulations have threatened the viability of 56 percent of U.S. coal plants, while competition from much-touted low natural gas prices threatened only 9 percent of coal plants. Conversely, mounting federal subsidies for renewable energy have shielded the wind and solar industry from competition at the expense of competing sources like coal and nuclear power.
According to the Institute for Energy Research, government policies have led to solar power being subsidized by over 345 times more than coal, and wind being subsidized over 52 times more. And this subsidization is costly for consumers. Data from the Department of Energy reveals that each energy sector requires vastly different labor inputs to produce the same amount of electricity: one coal worker equals two natural gas workers, or 12 wind industry employees, or 79 solar workers. And while coal creates 7,800 jobs per Megawatt-hour, wind yields only 2,200, and solar 98. Without subsidies, wind and solar would fare poorly when competing in the free market against coal and natural gas.
States need to protect their base load power, and Secretary Perry is taking a prudent approach in examining such considerations. The heavily subsidized growth of renewables is indeed impacting other power sources, leaving U.S. taxpayers paying more for a less diverse supply of energy. Thus, Perry is right to consider whether America is still on track to meet future power needs, and at a price that consumers can still afford.