Thanks to EPA’s Clean Power Plan, New England’s Expensive Electricity Reality Could Be the Nation’s Fate

by William Yeatman on December 15, 2014

in Blog

The New York Times last weekend took note of *skyrocketing* utility bills in New England. According to the paper of record,

For months, utility companies across New England have been warning customers to expect sharp price increases, for which the companies blame the continuing shortage of pipeline capacity to bring natural gas to the region. Now that the higher bills are starting to arrive, many stunned customers are finding the sticker shock much worse than they imagined.

New England ratepayers are suffering primarily due to the fact that the regional grid (known as the “ISO-NE”) has undergone tectonic shifts over the last decade, as the region’s fuel mix has shifted dramatically from coal and oil to natural gas. In 2000, coal, oil, and natural gas provided 18 percent, 22 percent, and 15 percent (respectively) of total electric production in ISO-NE; in 2013, coal, oil, and gas provided 6 percent, less than 1 percent, and 46 percent.

It’s not that over-reliance of natural gas, per se, has caused utility bills to blow up; after all, gas is plentiful in the region, thanks to the nearby Marcellus shale, where gas production is booming due to the “fracking” technological breakthrough. Rather, the problem is constraints in gas pipeline capacity. There’s too much demand for gas, and too little infrastructure to deliver the gas. The logistical shortfall is especially pronounced in the winter, when gas demand for power competes with demand for space heating.

In fact, such supply chain bottlenecks historically have been a difficulty commonly attendant to central planning, and, in this vein, environmental policy (at both the State and federal levels of government) has been a major impetus for the recent dramatic shift in fuel resources in New England. Simply put: In a fit to go green, the region went too fast, too soon.

The region thus offers a lesson for the nation as a whole, because EPA’s Clean Power Plan similarly would overhaul overnight the U.S. electricity business. This comparison—between what New England is enduring now and what America could expect given the Clean Power’s implementation—recently was made by FERC Commissioner Tony Clark in response to written questions posed by the Energy and Commerce Committee:

The New England region, which has arguably gone further than any other in already adopting what EPA envisions in its Clean Power Plan, is a case study in the pitfalls of making this transition rapidly. Electricity prices in New England far exceed the national average, and reliability is a very real challenge during critical periods of the year.

I’d be remiss if I failed to note the paramount role played by environmentalists in the plight of the New England electric ratepayer. In addition to agitating for the rules that contributed to the retirement of coal-fired power plants, green special interests have been the primary political force in opposition to building natural gas pipelines.

As aptly tweeted by Heritage’s David Kreutzer,




William Yeatman December 16, 2014 at 12:45 pm

It reads “tectonic shits,” you nincompoop.

Keith DeHavelle December 17, 2014 at 12:39 pm

Gives rather a new meaning to “incontinent,” does it not?

A pity that we cannot elect Republicans who intend to stop this nonsense. We’ve elected people who pretended to be such … but that doesn’t work.

We suffer real damage and the loss of real lives from the catastrophists’ efforts to (they claim) prevent milder, uncertain future effects. This stands the precautionary principle on its head.

==============/ Keith DeHavelle

William Yeatman December 16, 2014 at 12:46 pm

Since corrected; thanks for pointing it out, you handsome rogue.

Andy December 19, 2014 at 6:55 am

This is brilliant!

Mary December 17, 2014 at 10:34 am

If you copy the USSR, as the US has done with everything centrally planned by a distant group of elites, you can expect the same results. Read Gaidar’s account of the USSR from Stalin’s death to its collapse to see the similarity to the current US (“Collapse of an Empire”).

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