Speakers at NARUC conference address the need for coal-fired power

Coal power generation interests are preparing to try and convince state public utility commissions that coal remains vital to affordable energy for most Americans and also can be used while reducing air pollution.

This was the message that American Coalition for Clean Coal Electricity (ACCCE) Senior Vice President Robert Paduchik presented to a subcommittee on coal and carbon sequestration on July 22 at the National Association of Regulatory Utility Commissioners (NARUC) summer conference in Portland, Ore.

The coal power sector will be pressing its case on three fronts, Paduchik said. The sector wants to show policy makers that domestic air quality in most places has actually improved in recent years at the same time that the nation’s coal burn grew dramatically. ACCCE will also stress the importance of affordable electricity to most Americans and coal’s role in that.

Finally, Paduchik said coal interests will seek to convince policy makers they should not gamble too much of the nation’s electric power future on natural gas. ACCCE will show long-term trends that indicate coal’s price history is much more stable than natural gas.

Coal officials say cheap natural gas isn’t guaranteed

While still historically cheap, natural gas prices have changed significantly in the past couple of months, Paduchik said.

No one can predict with certainty what the price of natural gas will be tomorrow, much less two or three years from now, said long-time energy attorney and economist Gene Trisko. For example, the U.S. Energy Information Administration (EIA) said in a recent forecast that it is highly confident NYMEX natural gas prices in late 2013 will be between $2 and $8/mmBtu. That’s a very wide range, Trisko told the gathering.

The West Virginia-based Trisko is working with ACCCE to update energy price research that he has been working on for more than a decade.

Statistics show that roughly half of American households have an annual gross income of $50,000 or less, Trisko said. In 2001, this household spent 12% of its after-tax income on energy needs (such as electric power, gasoline and residential natural gas). Today, however, it appears that same family is spending 21% of its after-tax income on energy needs.

Gasoline is the largest single factor in that increase. Its price has roughly doubled since 2001 and electric power prices have risen around 50%.

“It’s an understatement to say that the middle class has been hit by a truck” economically and energy has been a big part of the reason, Trisko said. While gasoline has been in the biggest culprit in recent years – how much will electricity prices rise in the next 10 years, Trisko asked.

Compliance with U.S. Environmental Protection Agency (EPA) deadlines is a major sector for the coal sector, which hopes for more time to install control equipment or face the prospect of retiring aging units. EPA recently indicated it could relax the projected timeline for some new standards – including provisions designed to reduce the number of fish killed in cooling water intake structures, various officials said.

The coal-fired utility sector believes that it has ample data to show that plants should get additional time to comply with tougher EPA standards, said American Electric Power (NYSE: AEP) External Affairs Managing Director Paul Loeffelman.

On the carbon front, a Tri-State Generation & Transmission Association official noted that his organization is doing research into capturing CO2 and using it as a commercial byproduct for uses aside from enhanced oil recovery.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.