Power Bills to Rise?

A recent poll of 500 utility executives yielded some interesting predictions about the future of the U.S. power industry. One answer, in particular, should surprise no one who has followed EPA regulatory activity in recent years: power rates are going up.

In the survey, conducted by the well-known firm Black & Veatch, more than 90% of utility executives believed that rules requiring fuel shifts from fossil fuels to more renewable energy would lead to higher monthly power bills. More than half of those surveyed said power bills would “rise significantly,” a term explained by CNN as up to 10% or more.

One reason, among many, for the predicted rise in power bills is regulatory action that is skewing the marketplace away from traditional sources of energy. Utility executives used to ask, “How can I deliver reliable power at the lowest possible price?” Today, the question is more like, “What fuel sources are available that will meet EPA regulations?” Through its rulemaking authority, EPA is rendering reliability and affordability less significant in the energy marketplace. Or, put another way, EPA is forcing utilities to focus on satisfying the agency instead of satisfying its consumers. That always means higher prices.

The survey results predict more than just higher prices, though. It shows just how far the national energy conversation has drifted from reality.

Working under the assumption that EPA rules would reduce the U.S. power industry’s coal consumption, respondents told Black & Veatch that their three preferred alternatives to coal, in order, are natural gas, hydropower, and nuclear. Solar and wind? The people responsible for keeping our lights on don’t judge those sources to be as “economically viable,” even by the Year 2020.

Other findings stand out, as well. Survey respondents chose nuclear power as their top environmentally friendly option. They also listed reliability as the top concern facing the power industry. When is the last time that those creating national energy policy addressed reliability, although reliable power is key to maintaining a strong manufacturing sector? Or spoke of nuclear as environmentally friendly, although nuclear technology is the most common sense option alongside fossil fuels for achieving a lower carbon future that is still affordable?

The message from the utility sector couldn’t be clearer: more regulations and fewer options will mean higher prices. It might even mean that power is not there when we need it. Paying more for a product that is less reliable? It wouldn’t take a poll to know most Americans would find that a bad bargain.