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Addressing Climate Change Is Best Accomplished With Innovation and Investment Through Competitive Markets, EPSA Says
BOSTON - John E. Shelk, president and CEO of the Electric Power Supply Association (EPSA), told the monthly dinner meeting of the Northeast Energy and Commerce Association here last night that the competitive electricity industry is rising to the challenge of meeting increased demand for electricity while addressing climate change and other environmental goals.
Shelk addressed the nature and extent of the challenge ahead. He said, "Simply stated, the challenge is to continue to provide reliable and affordable electricity, consistent with domestic and global economic growth, as demand continues to rise with every new electricity-powered gadget, while at the same time, reducing the carbon footprint of U.S. electricity suppliers and the planet as a whole."
Shelk said it's critical that legislators and regulators adopt policies that allow competitive suppliers to continue their successful efforts to provide electricity in innovative, more efficient, cleaner and cost-conscious ways to meet consumer's demands.
Shelk emphasized the proven ability of competitive wholesale markets in meeting energy and environmental challenges, stating, "Competitive suppliers are single-handedly responsible for the successful deployment of more efficient combined cycle gas technology that produces more electricity with less natural gas and lower emissions. We did the same with co-generation, or combined heat and power. These technologies would still be on the shelf were it not for federal and state decisions to break the barriers to competition."
When competitive suppliers took over the operation of nuclear and coal plants as part of restructuring, Shelk said, "The capacity factors at nuclear plants doubled and re-fueling times were cut in half, while the heat rates at coal plants were substantially lowered. As a result, the nation received more carbon-free nuclear power, while the higher efficiency of the coal plants saved on fuel and reduced emissions."
Shelk said, "Government statistics show that sulfur dioxide emissions are 51 percent lower in restructured states than in the regulated states, while nitrogen oxide emissions are 40 percent lower and carbon emissions are 22 percent lower."
Shelk said, "Competitive suppliers are applying for the first new nuclear applications in decades. They are seeking to surmount the issues facing carbon capture and storage to preserve coal options, making plans to expand gas-fired generation and building on their leadership in renewable energy. Competitive markets are best suited to maximize demand side management and other efficiency measures."
In order for competitive suppliers to continue to build on their record of success, Shelk said, "We need a federal system for mandatory, market-based limitations on greenhouse gas emissions so that we have a better sense of what climate constraints will apply to multi-decade, multi-billion dollar investments." He warned, "We have to make sure that critics of competition are not successful in their efforts to undermine competition by unfairly tilting the manner in which emissions allowances are administered."
In addition, he said, "It will take sustained market-based price signals to justify investment." He pointed to recent capacity auctions in ISO-New England and PJM as encouraging. "It is essential that the capacity markets be allowed to continue and that they are allowed to reflect economic reality."
Shelk said, "Now is not the time to change electricity regulatory horses in mid-stream, particularly when the nation most needs the wise investment and break-through innovation competitive markets offer."
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.