Power officials: Mandates driving up costs

Legislators heard Feb. 24 that even though recent utility bills have not spiked because of specific Delaware energy policy, overall federal mandates combined with state policy have driven up costs.

Power grid officials and energy experts met with legislators for a joint committee session to answer questions about energy reliability. It was the latest meeting convened by legislators over recent energy bill spikes.

Asim Haque, vice president of state and member services for PJM Interconnection, said energy reliability continues to be an issue as power plants are retired and replacements have not yet come online – a warning PJM issued in 2023 over mandates to shutter fossil-fueled plants such as coal. Coal and gas plants have long been part of energy production in the United States, offering a steady source of power that can be adjusted as needed to maintain the power grid.

PJM is a nonprofit grid operator. Its prime mission is to keep the lights on for the eastern interconnection region, said Haque. In the western half of the country, a grid works similarly, and Texas has its own, independent power system that is not connected to the eastern and western grids.

Although PJM has issued usage warnings during past cold snaps, Haque said this past Martin Luther King Jr. weekend cold snap was the highest winter peak usage in PJM’s 100-year history.

“Keeping the lights on throughout that duration, we stayed in close contact with a lot of your agencies associated with concerns that we were seeing on the grid,” he said.

In response to an energy complaint filed by Pennsylvania in December, PJM referred to its 2023 report that stated state and federal policy decisions have pushed generators to retire prematurely.

Haque said that continues to be true. 

“This is where things are starting to get hairy for us. We are forecasting quite a few retirements between now and 2030. A lot of them are driven by policy,” he said.

Three of them were federal Environmental Protection Agency rules, compounded by laws in Illinois, New Jersey and Virginia, he said.

“We are going to see a lot of resources leaving the system,” he said. “A lot due to policies in place to push resources off the system, primarily environmental policies, some economic.”

Data center proliferation and the race for artificial intelligence are also using a chunk of energy to operate. Both are essential to economic growth and prosperity in the U.S., Haque said, but they are also increasing demand for power.

The growth of electric vehicles plugged into the grid is another factor driving demand.

When Rep. Debra Heffernan, D-Bellefonte, chair of the House Natural Resources and Energy Committee, asked whether Delaware policies have caused energy price increases or power plants to close, Haque said no.

“We did not find a Delaware policy that was explicitly pushing resources off the system,” he said.

Delaware represents 1 million users out of 70 million served by PJM, and Delaware consumes more power than it produces. Heffernan said she wants people to know Delaware is creating policies to increase new energy creation. Delaware law requires solar and other non-fossil-fueled power sources to make up a portion of the state’s energy portfolio.

“We’ve heard a lot of comments previously, not in this meeting, about Delaware state policies causing power plants to go offline, and it was emphasized pretty strongly that it is not Delaware policies that are causing that,” she said.

But when considering the aggregate effect of policies, Sen. Brian Pettyjohn, R-Georgetown, said it adds up.

“It’s death by 1,000 cuts,” he said. “The direct [state] policy, probably not, or it's negligible.”

Regulations requiring carbon credits to be purchased also add costs to plants, such as the 410-megawatt unit of the coal-burning Indian River power plant that was taken offline Feb. 23. Coal, along with natural gas and nuclear power, provides a base load of constant energy supply so that power is on when the sun is not shining or the wind is not blowing.

Pettyjohn said he remembers when black plumes used to emanate from the plant’s smoke stacks in the 1970s, but when scrubbers and particulate filters were installed, many harmful emissions were eliminated. “That was one of the cleanest coal plants out there,” he said. 

Replacing the 410 MW with solar would take a huge amount of farmland, based on calculations provided during the meeting, Pettyjohn said. At the estimated 6 to 8 acres of land needed to produce one MW of solar power, he figured, thousands of acres of farmland would be needed for solar panels. “That’s a lot of acreage even to just meet the generating capacity that was taken offline from Indian River,” he said. “That’s just to get that back.”

Rep. Rich Collins, R-Millsboro, whose district includes the Indian River power plant property, said more should be done to keep base load power plants online.

“We’re putting the people out of business who can make power, and we’re hoping this other way of making power is going to work out,” he said. 

The forecasted demand for energy is “intensely high,” Haque said, and it’s projected to increase in future years.

Sen. Stephanie Hansen, D-Middletown, chair of the Senate Environment, Energy & Transportation Committee, said she has some thoughts on the next steps for Delaware energy policy.

“Now that we know we’ve got a problem, we need to address it as quickly as we can. And we know we have certain levers we can pull,” she said. “What we need to do is decide what our mix is going to look like.”