New Power Plants: Won’t Make Electricity Cheaper
The bottom line of the article at Industry Week is that while there are quite a few new power plants being built or on the drawing board to be built, it wont be enough. On top of it there are serious problems with the underfunding of the national transmission system that will likely mean no reductions in electricity prices, and increases.
While power generation requires attention, both electricity users and consumers say the transmission system requires equal, if not greater, attention. Indeed, “Ensuring a fully adequate transmission system and a regulatory system that allows consumers to benefit from lower-cost generation are more important to most American manufacturers than generation, which is adequate in most areas,” says Marc Yacker, vice president, government and public affairs for ELCON, a national association of large industrial users of electricity. “Prehistoric” is how Yacker describes the transmission system in some parts of the United States.
The problem is that transmission systems cross state borders making such systems in the purview of both state and federal regulatory agencies. Further, the rate of return on transmission systems is generally pretty low. And to add insult to injury lets not forget NIMBYism, BANANAism, and environmentalism, all of which can kill both planned construction of generation and transmission lines. Not only does the poor state of the transmission system raise issues with regard to the systems relibability, but also it poses issues for the cost of electricity. Congestion on transmission lines can be a big factor in driving prices up. So if your electricity bill has been going up, don’t plan on it going down anytime soon. In fact, plan for further increases. And given that 80% of the planned new generation capacity is fired by natural gas, plan on your heating bill going up as well (assuming you heat with natural gas).