Where electricity comes from…and why you should care.
We flip a switch. We press a power button. We plug in. We power up, and things happen the way they
should. In today’s power-hungry society, we expect a never-ending supply of electricity – but how often
do you think about where it comes from? And why should you care?
About 95 percent of PowerSouth’s power is generated using fossil fuels -- primarily coal and natural gas.
A small portion comes from renewable sources, such as wind, hydro (water) and landfill gas.
Fossil-based electricity generation is under great scrutiny from an environmental standpoint, as both
state and federal agencies set limitations on emissions, byproducts and other aspects of operation.
While everyone agrees that electric utilities should take steps toward a cleaner environment, some of
these regulations could be detrimental to fossil-fired power plants, their employees – and ultimately the
cost of electricity.
The Environmental Protection Agency (EPA) has announced a set of rules – referred to as “the MACT
rules” – that govern emissions of mercury, acid gases, particulate matter and other gases from 200,000
boilers nationwide. These boilers burn natural gas, fuel oil, coal, wood or other fuels to produce steam
to generate electricity or other industrial processes.
Collectively, the MACT rules will affect a number of major industries, including pulp and paper, steel,
chemical manufacturing and petroleum. In many cases, compliance would require either switching fuels
or installing control technology to reduce emissions. Electric utilities are concerned about the Utility
MACT rule’s potential negative effects on energy costs, availability of electricity and the economy as a
whole.
The Utility MACT rule in its current form will affect 1,350 coal and oil-fired units at 525 power plants
across the country. Utilities will balance the cost of compliance with operational costs to determine the
most economical strategies for the future. Many will simply be unable to justify making the needed
adjustments due to cost, age of the plants or other factors. Closures of U.S. coal-fired power plants
could increase sharply, resulting in the loss of one-fifth of our nation’s coal-fired power plants. The
economic ripples would also extend to consumers as layoffs and unemployment increases and the cost
of goods rises.
The estimated cost of the Utility MACT rule is staggering. EPA officials have estimated that the rules
come with a compliance price tag of $10.9 billion, making this regulation one of the most expensive in
history. This cost will be passed along to consumers like you in the form of higher costs – not just of
electricity but of everything you purchase. This translates into a loss of $400 to $500 in annual buying
power for the average family.
The electric utility industry has made great strides toward making today’s generating plants safer, more
efficient, more economical and more environmentally sound than ever before. Between 1980 and 2008,
the industry reduced sulfur dioxide and nitrogen oxides by 57 percent; and mercury emissions were by
about 40 percent. All despite the fact that electricity use in the U.S. increased by 85 percent during this
period.
PowerSouth Energy Cooperative is still analyzing the full impact of the Utility MACT rule on its power
plants and reviewing its options to find the most cost-effective solution. Our coal-fired Lowman Power
Plant already has scrubbers installed that reduce sulfur dioxide and selective catalytic reduction
equipment to reduce nitrogen oxides. Together, these technologies provide the co-benefit of mercury
reduction. However, Utility MACT could require PowerSouth to install additional control equipment.
So why should you care?
The Utility MACT rule, like many other energy issues, is extremely complex. With 276 pages in the rule’s
documentation, even industry experts have a tough time making sense of it.
PowerSouth and many other non-utility agencies have studied the Utility MACT rule, and most agree
that its economic consequences would be devastating. With utilities being forced to spend millions of
dollars for compliance, it is only logical to conclude that the cost of electricity will increase, too.
So for electric consumers, plugging in and powering up will come at a greater cost. Now that’s
something you should care about.