In January of 2008, then Senator and presidential candidate Barack Obama, talking about his energy plan, told the San Francisco Chronicle, “When I was asked earlier about the issue of coal…under my plan of a cap and trade system, electricity rates would necessarily skyrocket…” He wasn’t kidding.
While he was talking about his cap and trade plan, something that went nowhere in Congress, even when Democrats controlled it with a filibuster-proof majority in the Senate, his objective of changing how we generate electricity hasn’t changed. Neither has his lack of concern for the cost to consumers.
President Obama hates coal because he has deemed it too “dirty.” It’s also the largest generator of electricity in this country. Were there a cheaper, easier (and even cleaner) source of electricity generation the market would have embraced it because that’s how markets work. But there isn’t, at least not yet.
But rather than allow the market to work, something new to be developed, the President seeks to force it, to steer it where he wants it to go. It’s something politicians have tried to do since there was a market to steer, and something they’ve failed to do successfully since their first try (Great Leap Forward anyone?).
President Obama wants to steer electricity generation away from coal to natural gas. The only problem with that is our system is set up for coal, coal is abundant and coal is easier to get. While the market may naturally gravitate to natural gas as it becomes easier to get through fracking, something the Left has demonized and is fighting, we’re not there yet.
Just like the public and humiliating failures of subsidized solar companies like Solyndra and so many others, the technology may be there but simply existing doesn’t make it practical. Neither does willing it to be.
The automobile existed for years before it took over from trains and streetcars as the dominant mode of transportation, not because it didn’t work, but because it took until Henry Ford found a way to make them affordable. The government didn’t force it, the market did.
President Obama, through the power of regulation, is seeking to force the electricity generation market in a direction it simply isn’t ready to go. And consumers will be the ones who suffer.
Coal fueled electricity generating plants can’t just flip a switch and use natural gas, changing them over is time consuming and, most importantly to consumers, very expensive. The cost of doing so will not be eaten by these electric companies, it will be passed on to consumers. And, as President Obama said, the electric bills of those consumers will “necessarily skyrocket.”
This isn’t just hyperbole. A survey of electricity executive indicates 90 percent of them expect the costs of moving away from coal power plants to lead to higher electricity bills for consumers. More than half of the survey respondents predict at least a 10 percent increase.
More than a survey, as Phil Kerpen, President of American Commitment, reports:
…PJM Interconnection, the company that operates the electric grid for 13 states held its 2015 capacity auction…The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt. That’s eight times higher than the price for 2012, which was just $16 per megawatt.