The Future of Your Pocketbook

A few weeks ago as I was gearing up for trick or treaters, many Halloween displays had already been replaced by Christmas blitz. Black Friday has been replaced by Black Thursday—what we more traditionalists like to call Thanksgiving. Cyber Monday has joined the fray.

Retailers are beginning earlier and earlier every year in an effort to strike the first blow in the yuletide merchandising sweepstakes. When the first one jumps in—the others follow suit. They are all fighting for your disposable income before the pressures of year-end expenses and higher winter energy bills hit your mailbox.

The fight for your pocketbook is on in the energy arena. Looming higher energy prices will take a toll on all of us. For those less fortunate among us, higher energy prices can force some tough decisions between heat, light, or medicine. Getting that little something extra to put under the tree may become the visions of sugar plums.

The U.S. Environmental Protection Agency (EPA) has recently upped the stakes for affordable energy. The proposed rule it released in September essentially takes a key fossil fuel off the table as a future energy choice.

Affordable, reliable electricity has been a key component of the American economic engine for the past 100 years. Coal-generated power has helped keep electricity affordable because it is a domestic, abundant, and affordable resource that currently generates more than 40% of our nation’s electricity.

In 2012, 70% of the co-op generated kilowatt hours came from coal. Nearly 70% of the co-op owned coal generation was built from 1973 to 1987 during the Oil Embargo and Fuel Use Act years when Congress banned the use of natural gas for electricity.

These coal units still have significant remaining useful life. While the best available control technology for pollution reduction was installed when these units were built, co-ops also have spent billions on pollution control upgrades more recently to meet current EPA regulations. In some cases, the cost of these upgrades exceeded the original cost of the power plant. 

Co-ops are concerned how EPA’s regulations will make these existing power plants uneconomical to run, raising power prices and affecting the wallets of millions of fixed- and low-income Americans who already spend a disproportionate share of their income on energy. 

This new regulation is being proposed as we see promising news being released by the Energy Information Administration (EIA), the federal agency that tracks energy production, consumption, and emissions data. The EIA reports that carbon dioxide (CO2) emissions are falling. The 2012 downturn (3.8%) means emissions are at their lowest level since 1994 and over 12% below the recent 2007 peak. (See www.eia.gov/environment/emissions/carbon/ for the full report.)

Although Gross Domestic Product (GDP) increased by 2.8% in 2012, energy consumption fell by 2.4% in that same year. The result was a 5.1% decline in energy use per dollar of GDP. The emissions decline was the largest in a year with positive growth in per capita output and the only year to show a decline where per capita output increased 2% or more. U.S. energy-related carbon dioxide emissions have declined in all but one year since 2007. 

Thirty-five years ago, there was the political will in this country to force electricity generation away from natural gas and towards coal. Let’s hope that same political will exists today to recognize the emission reductions we have seen, and that any further regulatory response must be cautious and measured. The future of your energy pocketbook may hang in the balance.    

First published in Enchantment, the voice of New Mexico’s Rural Electric Cooperatives. Republished with author’s permission.

Image courtesy of 401(k)2012 via Flickr


ABOUT THE AUTHOR

Keven J. Groenewold is the Executive Vice President and General Manager of New Mexico Rural Electric Cooperative Association (NMREA). Keven has worked for the Public Service Company of New Mexico, New Mexico State University, Los Angeles Department of Water and Power, Energy Consultants, Inc., and the New Mexico Public Utility Commission. He holds a Master of Science in Electrical Engineering from the New Mexico State University.