Indiana and Coal

Global electricity demand is expected to grow by 70% between 2010 and This is the equivalent to adding the population of U.S., E.U., Africa and China to the worlds energy consumers. (International Energy Agency) Half of the world’s population has limited or no source of electricity. (3.5 Billion) In the United States 80 million people now qualify for energy assistance. New regulations proposed by the E.P.A could cause price increases by 35% by 2020 forcing energy assistance in the U.S. to rise to 115 million.

EPA regulations to date (MATS) will close 20% of the coal base load power capacity that supplies the lowest cost electricity EPA estimated closures from the MATS rule and underestimated by a factor of about 10. This puts grid reliability at risk. FERC, NERC, MISO, and ERCOT have all indicated concern about grid reliability because of the proposed rule. EPA’s policies have resulted in the elimination of low cost and reliable sources of electricity and replacing it with more expensive and less reliable sources exposed to significant price volatility. (Wind, Solar) Their models are states (e.g., CA, NY) with the highest cost electricity in the country. California’s electricity rates are 45% higher than the national average. (competition) EPA is pushing a Cap and Trade policy onto the states for compliance with the policy. Cap and Trade legislation was defeated in Congress 4 years ago, but this Administration has chosen to go around the House and Senate.

Facts For Indiana 92% of the increased electricity demand from last winter was supplied by coal plants (National Coal Council Report). Many of those plants are slated for closure in next two years due to EPA MATS rule. AEP stated that it ran this winter 90% of their coal plants that are slated for closure in the next year due to MATS rule. Nick Adkins, AEP CEO, testified that this winter utilities had to make choices between using gas for generating electricity or heating homes. This is a choice that may become more frequent with policies that cause further closure of coal plants. California’s average retail price for electricity is 45 percent higher than the national average. They have almost no in-state coal generation (under 1%) according to EIA data, but the state gets about 8% coal generation from neighboring states on the grid. Indiana 80% coal generation