The genius of the free market is that it provides consumers with more for less. That principle is turned on its head in the Obama era, as Americans face the prospect of getting less for more when it comes to powering their homes and workplaces. In a poor economy, that’s bad news for folks who’ve already tightened their belts to the final hole.
Cheers went up last week from the self-proclaimed green lobby, including the Sierra Club and Greenpeace, as they reached a milestone in their quest to drive up the cost of America’s fossil fuels. On Feb. 29, two utility companies announced the shuttering of nine coal power plants in the East and Midwest. That sent the number of plants slated for deactivation since 2010 beyond the century mark to 106.
GenOn Energy said it would shutter seven coal plants and one oil-fired plant in Pennsylvania, Ohio and Illinois with a total generating capacity of 3,140 megawatts. Midwest Generation followed suit with an advisory that it would close two coal plants serving Chicago.
The shutdowns represent a victory for President Obama, who in a 2008 interview as a candidate signaled his intention to run the coal industry into the ground: “So if somebody wants to build a coal-powered plant, they can, it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s emitted.”
The president has made good on his promise. The Environmental Protection Agency (EPA) has squeezed coal producers in its campaign to halt carbon dioxide, the same “greenhouse gas” all animals produce when exhaling. In December, the agency announced new regulations limiting mercury emissions that will force many power plants out of business within four years.
The EPA estimates utilities across the country will need to shell out at least $9.4 billion in 2015 to meet its new mandate, but House Republicans put the true cost at $84 billion. Companies that stay in business will have to install expensive equipment that will drive up consumers’ monthly electric bills. The average retail price of electricity in America already has climbed 46 percent since 1997, says the U.S. Energy Information Administration (EIA).
Cleaner-burning natural gas is touted as a viable substitute for coal but the transition can’t be completed overnight. In the meantime, the nation’s net electricity generation is falling, down 7.1 percent from 2010 to 2011, says the EIA. Demand for electricity is projected to rise by 35 percent by 2035.
Green-energy enthusiasts look to windmills, solar panels and vegetable oil to save the day, but these trendy energy sources combined generate less than 5 percent of the nation’s energy - despite billions in subsidies. The net result of this policy could be electricity shortfalls when usage peaks in the summer. The energy brain trust has a remedy: Millions of homes across the country have been equipped with “smart meters” that can be instructed to hold back the juice. Brownouts might dim the future as Americans in the Age of Obama learn to get by with less.