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InsiderOnline Blog: May 2012

The Obama Administration’s War on Coal Is Yielding the Intended Result: Higher Electricity Prices

“Last week the U.S. Energy Information Administration reported a shocking drop in power sector coal consumption in the first quarter of 2012. Coal-fired power plants are now generating just 36 percent of U.S. electricity, versus 44.6 percent just one year ago. […]

“Last week 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. In the mid-Atlantic area covering New Jersey, Delaware, Pennsylvania, and DC the new price is $167 per megawatt. For the northern Ohio territory served by FirstEnergy, the price is a shocking $357 per megawatt.

“Why the massive price increases? Andy Ott from PJM stated the obvious: ‘Capacity prices were higher than last year’s because of retirements of existing coal-fired generation resulting largely from environmental regulations which go into effect in 2015.’ Northern Ohio is suffering from more forced coal-plant retirements than the rest of the region, hence the even higher price.” [Phil Kerpen, Fox News, May 22]

Posted on 05/23/12 11:02 AM by Alex Adrianson

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