Green energy policy will push prices up this summer, FERC commissioners warn

Green energy policy will push prices up this summer, FERC commissioners warn

Federal and state policies designed to rapidly decarbonise the US economy will lead to further increases in already high energy prices this summer, according to current and former federal energy officials.

For example, climate policies have led to an increase in premature shutdowns of natural gas power plants and reduced investment in the development of domestic fossil fuel infrastructure, Federal Energy Regulatory Commission (FERC) told Fox News Digital. Too rapid a transition from traditional fossil fuel production to wind and solar energy also increases the possibility of an unstable grid and large-scale outages.

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“Americans are already suffering from a gas station, and I’m very afraid that the combination of extremely high prices and the possibility of blackouts and brownouts will really bring home the fact that we have taken our eyes off the reliability that we have lost this critical focus in our passion for decarbonisation,” he said. former FERC chairman Neil Chatterjee in an interview with Fox News.

“When I was at FERC, I felt it was my main duty, our responsibility to oversee network reliability,” continued Chatterjee, who served at FERC from 2017-2021. “I think we have given priority to decarbonisation over reliability, and unfortunately it will take catastrophic events before things are recalibrated and we refocus on reliability.”

Steam rolls out of the chimneys of the Naughton Power Station on January 12, 2022 in Kemmerer, Wyo. (AP Photo / Natalie Behring / AP Newsroom)

According to the Energy Information Administration (EIA), the average wholesale electricity price between June and August is expected to rise significantly compared to the same period last year. Consumers in New England alone are expected to pay 200% more year-on-year electricity this summer.

Henry Hub’s futures index, the US benchmark for natural gas prices, showed trading at between $ 6.85-6.88 per million British thermal units (MMBtu) on Wednesday for the rest of the summer. The comparison index averaged $ 3.26 per MMBtu in 2010-2021, according to the Federal Reserve.

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“From the beginning, the Biden administration has pursued a policy of aggressively giving up fossil fuel production,” Chatterjee told Fox News Digital. “I’m someone who is excited about the energy transition and believes that the energy transition has great benefits for Americans, but there are some people in the administration who want to skip the transition and transition dramatically away from the necessary generation we need.”

“Now we see the consequences of how incredibly high prices will hit consumers,” he said.

Block Island Wind Farm

Block Island wind farm on Long Island, NY, is displayed on April 16, 2021. (Mark Harrington / Newsday RM via Getty Images / Getty Images)

Chatterjee added that the FERC’s recent pipeline policy would increase gas prices and damage the reliability of the US electricity grid. The Commission has issued two policy statements calling for an analysis of climate impacts and greenhouse gas emissions as part of the federal pipeline approval process.

FERC Commissioner Mark Christie, one of two Republicans on the Democrats’ majority commission, said the policy was “a huge obstacle to developing the necessary pipeline capacity to use our domestic resources.”

“The uncertainty surrounding this certification policy remains a barrier to new investment in pipeline capacity,” Christie Fox told Digital News.

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Christie added that the policy further demotivates domestic gas production as companies face barriers to delivering supplies to the market. Smaller supply will lead to higher prices as demand grows during the peak summer months.

FERC President Richard Glick

Richard Glick, chairman of the Federal Energy Regulatory Commission, speaks during an energy conference in Houston, Texas on March 10, 2022. (F. Carter Smith / Bloomberg via Getty Images / Getty Images)

“Increasing gas production and supply cannot be done overnight and requires more than drilling, it requires an increase in gas transportation capacity,” he continued. “This requires sufficient pipeline capacity. Pipeline is the only real way to transport large quantities of gas from US gas fields to consumers.”

“No one will invest in new production unless they can bring gas to market,” Christie said.

The FERC has warned that state-regulated energy companies are prematurely shutting down “scalable” generation resources – including natural gas, coal and nuclear power plants – leading to capacity shortages. According to the EIA, about 15 gigawatts of electricity generation capacity are expected to be phased out in 2022.

West Virginia Coal Mine

Bulldozers transport coal at a coal processing plant in Logan County, West Virginia in 2015. (Luke Sharrett / Bloomberg via Getty Images / Getty Images)

The North American Electric Reliability Corporation (NERC), a federal grid watchdog, concluded in its annual summer reliability assessment that most countries are at increased risk of downtime due to lower production capacity.

“We have been slowly changing our mix of resources for many years, decommissioning older nuclear and coal-fired units and supplying only tons of wind and solar energy,” said John Moura, NERC’s director of reliability assessment and performance analysis. Fox News Digital in an interview. “And that’s something that’s really good in terms of our aspirations for decarbonisation ability.”

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“But that transition really can’t happen overnight,” he continued. “And creating a replacement generation and transmission really takes time. So we really have to work on pace control so that we don’t prematurely eliminate the generation we really need.”

Moura said it was important for the US to maintain dispatch resources during the transition to renewable energy to ensure network stability.

“Looking to the future, we see a greater risk,” he added.

Democratic FERC President Rich Glick referred Fox News Digital back to the agency’s press office. An agency spokesman declined to comment.

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