Time to address looming electricity shortage

The writing is on the wall for Michigan’s energy future and the picture isn’t pretty for consumers whose paychecks will shoulder bigger utility burdens.

A Michigan Public Service Commission study recently confirmed what anybody with a basic understanding of economics could have predicted: Michigan’s electricity supply will tighten during the next five years as producers shutter coal-fired power plants.

That supply pinch will drive prices skyward for consumers in a predictable relationship between supply and demand.

But the unsettling vignette in the larger picture for all electricity consumers isn’t that experts are forecasting the obvious when they assess production capacity and compare it to projected demand. No, it’s the blank spot filling the projected supply deficit.

Even in short term projections the U.S. Energy Information Administration predicts residential electricity prices will rise 3 percent in 2017 as the agency expects increasing reliance on natural gas power generation will coincide with a projected rise in natural gas prices.

Industry and policy experts expect Environmental Protection Agency regulations that are forcing utilities to shutter their coal-fired power plants will trigger an electricity shortage in the next five years when states like Michigan transition from net electricity exporters to energy importers. And too few new electricity producing projects are in the works to fill the predicted gap.

“The growing concern is whether, on the hottest and coldest days of the year, there will be enough physical generation to keep the lights on,” Eric Baker, CEO of Wolverine Power Cooperative, which supplies power to Cherryland Electric said, during an interview with the Record-Eagle. “Today the answer is yes, but when you look forward, as more coal plants are retired, it’s not obvious about what will replace them in Michigan.”

Baker’s observation that there is a looming hole nobody seems to be working to fill is a bit unsettling. It seems goals set both by state and federal agencies have been more focused on what resources are tapped when we flip a light switch than ensuring there’s enough electricity available to make something happen.

There certainly is cause to invest in renewable energy and curb emissions from the worst-polluting power plants, but those advances can’t ignore the necessity of on-demand electric supply during a sweltering summer day or a frigid winter night. That transition also shouldn’t cast aside common sense principles to preserve diversity in supply.

Ask anyone who has a 401k if it’s a good idea to put all your eggs in one basket.

Meanwhile, state lawmakers continue to consider net-metering legislation that would discourage homeowners from installing their own renewable power sources like solar panels or wind turbines, a move that is at best counterintuitive considering the looming electricity shortfall.

It’s time for lawmakers and industry officials to stop talking about the problem on the horizon and expecting someone else to step forward with a solution. After all, consumers are the ones who will be left in the dark when the supply buckles under the pressure of our demand.

– Traverse City Record Eagle