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Current Events => General Discussion => Topic started by: CG6468 on June 16, 2011, 08:53:39 AM
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Consumers' electric bills likely to spike as coal plants close
As stricter environmental regulations approach, some power generators are choosing to shutter their coal-fired plants.
Consumers' electric bills likely to spike as coal plants close
Consumers could see their electricity bills jump an estimated 40 to 65 percent in the next few years. (Handout)
By Julie Wernau, Tribune reporter
June 11, 2011
Consumers could see their electricity bills jump an estimated 40 to 60 percent in the next few years.
The reason: Pending environmental regulations will make coal-fired generating plants, which produce about half the nation's electricity, more expensive to operate. Many are expected to be shuttered.
The increases are expected to begin to appear in 2014, and policymakers already are scrambling to find cheap and reliable alternative power sources. If they are unsuccessful, consumers can expect further increases as more expensive forms of generation take on a greater share of the electricity load.
"Each generator will have to decide for itself whether the investment required to meet environmental requirements can be justified based on its projection of market prices and the cost of its capital. In any case, those costs will be passed through to consumers," said Mark Pruitt, director of the Illinois Power Agency, which procures electricity for Illinois.
American Electric Power, one of the country's largest coal-burning electricity generators, said Thursday it will retire nearly a quarter of its coal-fueled generating capacity and that it will spend up to $8 billion to retrofit remaining units to meet regulations that start taking effect in 2014. Those moves will have an impact.
"The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling,'' AEP Chairman and CEO Michael G. Morris said.
Exactly how much bills will go up is unclear.
What analysts know is that a portion of ComEd bills that pays electricity generators to reserve a portion of their power three years into the future will increase more than fourfold. That would translate into increases of $107 to $178 a year for an average residential customer in ComEd's territory, starting in 2014, according to calculations by Chris Thomas, policy director for consumer advocacy group Citizens Utility Board.
LINK: BOHICUYA (http://www.chicagotribune.com/business/ct-biz-0612-rates-20110611,0,7432941.story)