Cleaner air could mean higher electricity bills

Associated Press

NEW YORK

Electricity prices probably are on their way up across much of the U.S. as coal-fired plants, the dominant source of cheap power, shut down in response to environmental regulations and economic forces.

New and tighter pollution rules and tough competition from cleaner sources such as natural gas, wind and solar will lead to the closings of dozens of coal-burning plants across 20 states over the next three years. And many of those that stay open will need expensive retrofits.

Because of these and other factors, the Energy Department predicts retail power prices will rise 4 percent on average this year, the biggest increase since 2008. By 2020, prices are expected to climb an additional 13 percent, a forecast that does not include the costs of coming environmental rules.

The Obama administration, state governments and industry are struggling to balance this push for a cleaner environment with the need to keep the grid reliable and prevent prices from rocketing too much higher.

“We’re facing a set of questions that are new to the industry,” said Clair Moeller, who oversees transmission and technology for the Midcontinent Independent System Operator, which coordinates much of the electric grid between Minnesota and Louisiana.

Coal is the workhorse of the U.S. power system. It is used to produce 40 percent of the nation’s electricity, more than any other fuel. Because it is cheap and abundant and can be stored on power-plant grounds, it helps keep prices stable and power flowing even when demand spikes.