For some time now the country has been faced with the issue of how it is going to add to or replace its existing electrical baseload generation facilities.  Much attention has been given to natural gas price volatility, climate legislation, and the simple economic rule of supply and demand.  In the past few years we have become spectators to the electricity price fluctuations that have moved higher and higher. 

Although currently many of us have enjoyed a brief reprieve from record-setting price increases,  the day will come when prices go up and never come back down to current levels.  That day may come sooner rather than later.  Even though many economists recognize that the future of energy in our country is critical for future economic growth and affordability, no serious contingency plan for an energy industry collapse has been made.

History has shown that we became experts in the construction of central station electric power generation.  The costs for building this type of generation were manageable and the construction was relatively easy.  However, in today’s environment, this is simply not the case.  The cost of building new generation has skyrocketed.  So much red tape and opposition exist regarding new nuclear power plants that the last new reactor to become operational was a Tennessee Valley Authority (TVA) plant in 1996.  New construction would have been a major shot in the arm for economic recovery today. 

And each new day brings the need for even more electricity.  The U.S. Energy Information Administration forecasts that the need for electricity will climb by 30 percent between now and 2030. 

In the past ten years construction costs for highly efficient natural gas generating plants increased by 150%.  The same has happened to the cost of new nuclear or coal-based generation plants.  Plus, the expense of building coal-based generation facilities could be even greater with potential climate change legislation mandates in place.   Utilities are being forced to turn to natural gas which is a more expensive fuel.  The lower up-front costs but higher operating costs of natural gas generation traditionally make it a good fuel source for peaking power plants, not baseload power plants that generate electricity around the clock.

The high cost of alternative generation sources such as wind and solar, combined with poor reliability and efficiencies, keep this technology from offering an effective solution.  In addition, the challenges and costs of our country’s aging transmission system along with our nation’s growing demand for more electricity every day could further contribute to a potential energy sector collapse.  Without advancing technology, our options are limited.

There has never been a better time in our history than now for the consuming public to partner with the electric utility industry to conserve and practice efficiency.  Conservation along with a well thought out long range plan for our electrical future is paramount for the coming generations to enjoy safe, reliable and affordable electrical service.  The time is now to address these growing issues.  Otherwise, electricity could quickly become less of an affordable staple and more of a pricey luxury.

Thank You,

Jeff Loven
Email: jeff.loven@frenchbroademc.com


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