Utility executives on Monday warned of
skyrocketing electricity prices if the country is forced to limit greenhouse
gases and new technology to capture carbon emissions from coal does not pay
off.
Business Week: Monday, November 10, 2008-- Utility executives on Monday warned of skyrocketing electricity prices if the country is forced to limit greenhouse gases and new technology to capture carbon emissions from coal does not pay off.
"CO2 emissions is the biggest issue in this industry since Edison invented the light bulb," William Johnson, chairman, president and chief executive of Raleigh, N.C.-based Progress Energy Inc., said during a panel discussion at financial conference of the Edison Electric Institute, an industry group.
James Miller, chairman, president and CEO of Allentown, Pa.-based PPL Corp., said coal seems out of favor and nuclear's future remains cloudy. "Over the long haul, I fear we will have a rush to (natural) gas again," he said.
President-elect Obama has said he wants to act quickly on climate change legislation that would impose limits on the heat-trapping gases blamed for global warming.
Another panelist, Democratic Congressman Rick Boucher of Virginia, said the technology for capturing carbon does not exist now. But he said legislation to be enacted by Congress likely will put off for several years the more drastic limits on greenhouse gases -- allowing enough time for the technology to be developed.
He sought to reassure utility executives that there will continue to be a place for coal because without it, the U.S. economy would be damaged.
He said the goal is to come up with legislation that provides the maximum environmental benefit at the least expense to the economy. Coal generates about half of the electricity used in America.
But Miller and Johnson seem skeptical that the technology would be ready fast enough.
"If we don't accomplish that, we don't accomplish nothing other than imposing a massive cost on the economy," Miller said.
Johnson worried that energy prices could double as more demand for natural gas could send gas prices much higher.
Backing up their claims was a study released Monday by the North American Electric Reliability Corp., the agency that oversees the nation's power grid, that shows about 34,000 megawatts of coal fired generation have been canceled or postponed between 2002 and the first half of 2008.
"As a high carbon-emitting fuel, coal will likely continue to face obstacles as climate change initiatives progress," the report said.
Meanwhile, NERC said its assessment shows an increase of more than 20,000 megawatts of additional natural gas capacity planned between now and 2016 compared with just a year ago.
"Natural gas has increasingly been viewed as the 'fuel of choice' by the electric industry as natural-gas fired plants are typically easier to site, have shorter construction times and have lower emissions than coal plants," NERC's study said.