The Register-Herald, Beckley, West Virginia


December 25, 2013

Bad idea

This week we reported some good news about coal, which is rare enough these days.

The coal industry has been rocked by competition from other energy sources, such as natural gas, but much of the harm done to coal has come via regulatory fiat by the federal government.

The Obama administration in particular, through the Environmental Protection Agency’s rule-making, has made building new coal-fired power plants in the United States practically impossible due to its demands on carbon capture and storage.

Those rules mean the cost of a new coal-fired power generating station, depending on its capacity, will rise from about $1.5 billion to somewhere near $6 billion. Those numbers make building new coal plants economically impossible for most power companies.

That good news we reported is that other countries around the globe have more sense. Germany has built one new coal-fired plant, and plans 10 more over the next two years. Japan, reeling from the 2011 tsunami and the meltdown at the Fukushima nuclear plant, is also turning to natural gas and coal to replace power formerly generated by its nuclear industry.

It is significant, we think, that both Germany and Japan were the two developed countries that invested most heavily in nuclear power.

Obviously, they are rethinking ways to meet their electricity demands, and that means good things for West Virginia coal exports.

But what about here in the United States?

In November, reported the federal Bureau of Labor Statistics last week, the price of a kilowatt hour of electricity set a national record of 13.0 cents for the month.

That was actually down from earlier in the year but it is significant because it was the highest cost ever on average for the month of November since 1978.

The Bureau of Labor Statistics report notes that over the past 30 years electricity prices have doubled for American consumers.

Since these increases have come gradually, the impact from this rise has not been dramatic for ratepayers.

And the government’s response is to force power companies to take more coal-fired generating plants offline.

According to the U.S. Energy Information Administration:

“Low natural gas prices, weak electricity demand growth and the need to comply with the implementation of the Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS) regulations have led several power producers to recently announce plans for the retirements of coal-fired facilities.

“On Nov. 14, 2013, the Tennessee Valley Authority (TVA) announced that it was retiring eight coal-fired units with over 3,000 megawatts of generating capacity. The current retirement plans are an addition to TVA’s retirement plans publicized in 2011.

“South Carolina Electric & Gas (SCEG) announced that it had ceased operations at its Canadys Station generating facility earlier in the month. The 300-megawatt plant’s closing is part of SCEG’s efforts to reduce emissions and comply with MATS regulations.”

It seems certain to us that the federal government’s obsession with removing coal from the power-generating equation in the United States will do nothing to slow the trend that has Americans paying higher and higher costs for electricity.

American consumers deserve better.

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