Meeting local energy needs

Meeting local energy needs

November 13th, 2011 in Opinion Free Press

I f you want a demonstration of the dangers posed by heavy government regulation, a recent roundtable discussion at the University of Tennessee at Chattanooga provided one.

U.S. Sen. Bob Corker of Chattanooga listened as multiple business and energy leaders from the region explained how rising electricity rates - increases brought on in part by government regulation - can have a negative effect on economic development.

Years ago, Olin, a chemical company in Charleston, Tenn., relied in part on the Tennessee Valley Authority's low rates for electricity in making its decision to keep its Tennessee plant open, an Olin official said. Olin also spent $160 million to rid its manufacturing process of mercury.

But now, the official said, "TVA industrial rates are no longer competitive with the rest of the country."

Tom Kilgore, TVA president and CEO, acknowledged that the utility's rates are not as low, comparatively speaking, as they used to be. TVA's rates were once in the lowest 25 percent in the country. Now they rank 42nd most affordable among the top 100 electric utilities.

Kilgore said TVA hopes to get its rates into the lowest 25 percent once again, but he noted that having to comply rapidly with strict environmental regulations makes it tough.

"[T]he cost [of those regulations] is built into our rates," he said.

He said the proposed three-year time frame for TVA to clean up its coal plants' air controls is inadequate.

This is not just an academic debate. Jobs are threatened by excessive regulation.

According to one study, four major pollution rules proposed by the Environmental Protection Agency would cost the United States 183,000 jobs. That comes to four jobs lost for every "green job" projected to be created by the regulations.

The study also projected that as a result of the regulations, electricity rates in Tennessee and Kentucky - which rely in large part on coal for electricity - could rise by nearly 14 percent by 2020. That is more than twice the expected rate increase nationwide, and that could make it harder for our region to compete for new industry.

There is, of course, an excellent argument to be made for reasonable environmental regulations. No one likes objectionable emissions from energy production - emissions that can harm our quality of life.

But no energy source - including "green" but so far expensive sources such as solar and wind power - is perfect. They all have tradeoffs. Harshly clamping down on more traditional and plentiful energy sources such as coal can force up costs for energy to the point of seriously harming our economy and suppressing development.

And, for that matter, we need the traditional forms of energy just to maintain adequate power. There's simply no way around that.

The task is to balance sensible environmental protection with the need to keep the lights on.

That's not always going to be an easy balance to strike. But especially in the current weak economy, excessive environmental regulation that destroys jobs is clearly the wrong path for our nation to be taking.