Electricity Rates To Soar

Well, at least gasoline and natural gas prices are not going up — unfortunately we can not say the same for electricity.

According to the Energy Information Administration (EIA) projections, residential electricity rates are expected to hit record levels in 2015 and 2016. They go on to state that the "U.S. average electricity rates will hit a record high, this year, at 38 percent higher than they were in 2001."

They then predicate that that record is expected to be beaten in 2016, as prices hit 12.86 cents per kilowatt hour (kWh) – the highest annual average price in the 21st century.

Why?

Well, electricity rates have been slowly rising since 2001, according EIA data, and rates are set to rise even further as coal-fired power plants are shut down due to Environmental Protection Agency clean air regulations.

How many coal-fired generators are slated to shutdown over the coming years due to EPA rules? 381 generators.

I am not trying to state that the only reason electricity rates are going up are due to the EPA's regulations, but I do believe that it is a large part of it.

The EPA is also looking to nearly double the amount of coal-fired power that will be retired. The EPA says “that approximately 46 to 49 GW of additional coal-fired generation… may be removed from operation by 2020.”

What will take the place of the coal fired plants being shutdown?

Natural gas fired power plants.

What does that mean to the price of natural gas?

You guessed it — the price will rise due to an increase demand.

I hope you will remember next election who is driving up the cost of electricity and who tried to fight for the middle class to keep prices reasonable.

Call me tomorrow (Thursday) on the Live with Renk show, which airs Monday through Friday 9 a.m. to noon, to let me know your thoughts at (269) 441-9595.

Or please feel free to start a discussion and write your thoughts in the comment section.