ly. In the case of West Virginia, the state has an RPS that requires investor-owned utilities with more than 30,000 residential customers to generate 25 percent of their retail electricity sales from alternate and renewable energy sources by 2025. Virginia does not have a legislated RPS, but has a goal to generate 15 percent of 2007 electricity sales from renewable energy by 2025.
Several states had large percentage decreases in coal generation. One such state was Ohio. Comparing 2009 to 2008, its coal generation went down by 13 percent; its natural gas generation went up by 87 percent; and its average electricity price went up by 6.9 percent. Ohio has an RPS that requires its utilities to provide 25 percent of their retail electricity supply from alternate energy sources by 2025. North Carolina and Pennsylvania are other states with an RPS whose coal generation went down (13 and 11 percent, respectively). In 2009, their natural gas generation went up by 18 and 56 percent, respectively, and their average electricity price went up 5 and 3 percent, respectively. Pennsylvania’s RPS requires its utilities to generate 18 percent of their electricity from alternate energy sources by compliance year 2020 (June 1, 2020 to May 31, 2021). North Carolina’s RPS requires investor-owned utilities to generate 12.5 percent of 2020 retail electricity sales from renewables by 2021, while municipal utilities and cooperatives must meet a target of 10 percent of renewable energy by 2018.
In 2007, the Governor of Kansas rejected a permit for a coal plant due to carbon dioxide emissions. That was the first such rejection of its kind. Kansas, a primarily coal generation state, lowered its coal generation by 5 percent and raised its natural gas generation by 17 percent, with an electricity price increase of 8 percent in 2009 over 2008. Besides its rejection of a permit for a coal-fired plant, Kansas also has an RPS that requires utilities to provide 20 percent of peak demand capacity (based on the average demand from the previous three years) from renewable sources by 2020. Florida, while not an RPS state, passed legislation in 2008 that authorizes its Department of Environment Protection to develop a greenhouse gas trading program. In 2009, Florida’s coal generation went down 17 percent, its gas generation went up 14 percent and its electricity price went up 6 percent.
Other states with a lower coal share include Alabama and South Carolina, where coal generation declined by 25 and 15 percent, respectively, in 2009. While neither state has enacted a cap-and-trade or RPS program, both states capitalized on lower natural gas prices to switch from coal-fired generation to natural gas-fired generation, reducing carbon dioxide emissions as a result.
In 1988, coal’s share of electricity generation peaked at 56.9 percent of the market, over 12 percentage points higher than it is today. Athough coal lost market share thereafter, its generation levels in 2009 were still almost 15 percent higher than in 1988. During that time, sulfur dioxide emissions declined by more than 40 percent and nitrogen oxide emissions by more than 60 percent. Meanwhile, electricity prices increased by more than 50 percent. Many factors have entered into that increase, including: increases in fuel costs; regulatory impacts from the amendments to the Clean Air Act and other legislation; state regulation and legislation affecting fuel mix, emissions output, and the pricing of electricity; and proposals by the federal government to increase regulations and enact environmental and other legislation affecting the fuel mix of electric generators.
Consumers need to realize that these regulatory and legislative policies increase the price of electricity. And with pressure from the administration to pass energy and environmental legislation this year, U.S. utility companies are on notice that actions need to be taken to reduce emissions from fossil-fired generators.
Energy Information Administration, Electric Power Monthly, March 2010, http://tonto.eia.doe.gov/ftproot/electricity/epm/022