ON THE CHOPPING BLOCK: Coal-fired power plants like Mississippi Power’s Plant Daniel could be an endangered species under new EPA regulations proposed by the Obama administration.
By Steve Wilson | Mississippi Watchdog
According to a newly-released report, new Environmental Protection Agency regulations proposed by the Obama administration will cost each Mississippi homeowner $850 a year more for electricity and $340 for natural gas by 2020.
Energy Ventures Analysis predicts that if implemented Mississippi will pay an additional $4.8 billion a year – $3.5 billion in power rate increases and $1.3 billion through higher gas bills – by 2020.
Nationally, EVA predicts U.S. residential, commercial and industrial customers will see a 60 percent or $284 billion annual increase by 2020 in their power bills compared to 2012. Residential customers in the U.S. will pay an average of $680 or an increase of 35 percent a year according to the study.
It won’t just be residential customers footing a bigger bill. Industrial customers could be paying nearly double for their electricity, with rates spiking from 6.2 cents per kilowatt hour to 12.2 cents, according to the report.
Higher energy costs would be passed on to consumers in the form of higher prices for products.
“As these increases ripple through the economy, it’s going to slow economic growth,” Seth Schwartz, the president of EVA, told Mississippi Watchdog in a phone interview. “It’s taking money that people would’ve used to spend on other goods and force them to spend more on their utilities. It’s also going to cause industries to be less competitive in world markets.”
STILL BUILDING: The Kemper Project power plant, which converts lignite coal into a natural-gas like substance called synthesis gas to burn in its electricity-generating turbines, is two years behind schedule and won’t open until 2016.
The EPA is proceeding with several regulations including the Clean Power Plan, designed to cut 2005 carbon emissions levels by 30 percent nationally by 2030. Mississippi, however, must cut its emissions by 62 percent.
“The new EPA plan will increase power bills quite significantly because it’s going to force the closure of existing coal-fired plants, which generate some of the lowest-cost electricity today,” Schwartz said. “That generation capacity is going to have to be replaced by natural gas. These natural gas and renewable power plants are going to be more expensive than these existing coal-fired power plants.”
Mississippi’s Kemper Project, considered by the EPA a model for future coal-fired plants with its carbon-capture system, will not open until 2016, two years behind schedule. The project’s integrated gasification combined cycle plant, for converting lignite coal into natural gas-like synthesis gas to fuel the plant’s turbines, is years behind schedule and has been hit with massive cost increases.
At a cost of $6.1 billion to produce 582 megawatts, Kemper will be one of the most expensive plants per kilowatt hour in the country.
“There is no current technology that economically exists to remove carbon dioxide from emissions from power plants, whether they’re coal-fired plants or gas-fired plants,” Schwartz said. “The EPA regulations on new power plants require all coal-fired plants to do what the plant in Mississippi is doing and that’s reduce carbon dioxide emissions by over 50 percent.
“Since that technology economically doesn’t exist, it would cause existing coal-fired plants to close and be replaced by other sources of power.”
Mississippi is also expected to get 10 percent of its power from renewable fuels by 2020, a massive burden for the state, Schwartz said.
“EPA chose, for its basis, the highest growth in renewables that any state could achieve and simply applied it to all states,” Schwartz said. “In order to meet those targets, states will have to dramatically increase the construction of wind turbines and solar generating facilities, which are the only two sources that generate that amount of electricity that would meet these standards.”