‘Who turned off the lights?’

The Washington Times Weekly - - Commentary - By Stephen Moore

Is any­one pay­ing any at­ten­tion to the cri­sis that is go­ing on in our elec­tric power mar­kets? Over the past six months at least four ma­jor nu­clear power plants have been slated for shut­down, in­clud­ing the last one in oper­a­tion in Cal­i­for­nia. Mean­while, dozens of coal plants have been shut­tered as well — de­spite low prices and cleaner coal. Some of our ma­jor coal com­pa­nies may go into bankruptcy.

This is a danger­ous game we are play­ing here with our most valuable re­source — out­side of clean air and wa­ter. Tra­di­tion­ally, we’ve re­ceived al­most half our elec­tric power na­tion­wide from coal and nu­clear power, and for good rea­son. They are cheap sources of power and they are highly re­silient and re­li­able.

The dis­rup­tion to coal and nu­clear power wouldn’t be dis­turb­ing if this were happening as a re­sult of mar­ket forces. That’s only par­tially the case.

The amaz­ing shale oil and gas rev­o­lu­tion is pro­vid­ing Amer­i­cans with cheap gas for home heat­ing and power gen­er­a­tion. Hooray. The price of nat­u­ral gas has fallen by nearly two-thirds over the last decade and this has put enor­mous price pres­sure on other forms of power gen­er­a­tion.

But this is not a free-mar­ket story of Schum­pete­rian cre­ative de­struc­tion. If it were, then wind and so­lar power would have been shut­down years ago. They can’t pos­si­bly com­pete on a level play­ing field with $3 nat­u­ral gas.

In most mar­kets so­lar and wind power sur­vive purely be­cause the states man­date that as much as 30 per­cent of res­i­den­tial and com­mer­cial power come from these sources. The util­i­ties have to buy it re­gard­less of price. What a sweet deal. The Cal­i­for­nia state leg­is­la­ture just man­dated that ev­ery new home spend $10,000 on so­lar pan­els on the roof.

Well over $100 bil­lion of sub­si­dies to big wind and big so­lar were doled out over the last decade, and even with the avalanche of tax­payer sub­si­dies and bailout funds many of these com­pa­nies like Solyn­dra (which re­ceived $500 mil­lion in hand­outs) failed.

These in­dus­tries are not any­where close to self suf­fi­ciency. In 2017 the wind in­dus­try ad­mit­ted that with­out a con­tin­u­a­tion of a multi-bil­lion tax credit, the wind tur­bines would stop turn­ing.

This com­bines with the left’s war on coal through reg­u­la­tions that have de­stroyed coal plants in many ar­eas. (Thank good­ness for the ex­ports of coal or the in­dus­try would be in much big­ger trou­ble.)

Bot­tom line: Our power mar­ket is a Soviet cen­tral plan­ner’s dream come true and it is ex­tin­guish­ing our coal and nu­clear in­dus­tries.

Why should any­one care?

First, be­cause govern­ment sub­si­dies, reg­u­la­tions and man­dates make elec­tric power more ex­pen­sive. Nat­u­ral gas prices have fallen by two-thirds, but elec­tric power costs have still risen in most ar­eas — thanks to the re­new­able man­dates.

More im­por­tantly, the elec­tric power mar­ket isn’t ac­cu­rately pric­ing in the value of re­silience and re­li­a­bil­ity. What is the value of mak­ing sure the lights don’t go off? What is the cost to the econ­omy and hu­man health if we have rolling brownouts and black­outs be­cause the grid doesn’t have enough juice.

Politi­cians, util­i­ties and fed­eral reg­u­la­tors are short­sight­edly killing our coal and nu­clear ca­pac­i­ties with­out con­sid­er­ing the risk of fu­ture en­ergy short­ages and power dis­rup­tions. Once a nu­clear plant is shut­down, you can’t just fire it back up again when you need it.

Wind and so­lar are no­to­ri­ously un­re­li­able. Most places where wind power is used, coal plants are needed to back up the sys­tem dur­ing peak en­ergy use and when the wind isn’t blow­ing.

The first choice to fix en­ergy mar­kets is to fi­nally end the tan­gled web of lay­ers and lay­ers of tax­payer sub­si­dies and man­dates and let the mar­ket choose. Alas, that’s nearly im­pos­si­ble given the po­lit­i­cal clout of big wind and so­lar.

The sec­ond best so­lu­tion is for the reg­u­la­tors and util­i­ties to take into ac­count the re­li­a­bil­ity and safety of our en­ergy. Would peo­ple be will­ing to pay a lit­tle more for their power to en­sure against brownouts? I sure would. The cost of hav­ing too lit­tle en­ergy far ex­ceeds the cost of hav­ing too much.

A glass of wa­ter costs pen­nies, but if you’re in a desert dy­ing of thirst, that wa­ter may be worth thou­sands of dol­lars.

I’ll admit I’m not sure what the best so­lu­tion is to the power plant clo­sures. But if we have ma­jor towns and cities in the coun­try with­out elec­tric power for stretches of time be­cause of green en­ergy fix­a­tion, Amer­i­cans are go­ing to be mighty an­gry and our econ­omy will take a ma­jor hit.

When our man­u­fac­tur­ers, schools, hos­pi­tals, the In­ter­net and iPhones shut down, we’re not go­ing to think wind and so­lar power are so chic.

If the lights start to go out five or 10 years from now, we will look back at what is happening to­day and won­der how we could have been so darn stupid.

These in­dus­tries are not any­where close to self suf­fi­ciency. In 2017 the wind in­dus­try ad­mit­ted that with­out a con­tin­u­a­tion of a multi-bil­lion tax credit, the wind tur­bines would stop turn­ing.

Stephen Moore, a colum­nist for The Washington Times, is a se­nior fel­low at the Her­itage Foun­da­tion and an eco­nomic con­sul­tant with Free­dom Works. He was a se­nior eco­nomic ad­viser to the Trump cam­paign.

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