The Grid: Once Again, Congress Avoids the Issue

By Scott Bittle and Jean Johnson, via the Great Energy Challenge Blog.

Somewhere, pigs are flying and hell must be icing up, because Congress has actually spent some time discussing the electrical grid. As usual, however, they're locked in another partisan squabble, but procrastinating on addressing the more fundamental danger.

Over the past week, the Environmental Protection Agency has been defending its new, tighter air quality rules designed to reduce air toxics and mercury. The good news is these rules will probably force old, inefficient power plants to close. That's also the bad news.

The North American Electric Reliability Corp., the organization that worries about the state of the electricity grid in the United States and Canada, issued a report saying the fact that some 600 plants would need to be temporarily out of service for upgrades, and that others will likely be closed entirely, could put a strain on the grid in certain areas. Texas and New England both could have particular problems, and relatively soon.

Some Republicans in Congress and leaders in the energy industry want the new rules blocked or delayed, saying the threat to the grid is too great. The EPA and the Department of Energy say the fears are off base and have their own analysis showing power supplies will be sufficient. "In the 40-year history of the Clean Air Act, EPA rules have not caused the lights to go out, and we won’t let it happen going forward,” said Gina McCarthy, assistant administrator at EPA’s Office of Air and Radiation.

But whatever the merits of this specific debate, it’s yet another frustrating example of Congress’ penchant for near-term thinking.

America's power grid is essential -- and elderly.

Some 30 percent of the grid is 40 to 50 years old -- and that's of a network of more than 15,000 power plants, 220,000 miles of high voltage lines (the big metal towers) and another 5 million miles of distribution lines (the wooden poles outside your house). It's not going to last. Sooner or later it's got to be upgraded. Estimates vary, but the Electric Power Research Institute calculates we need somewhere between $338 billion and $476 billion to get to a "smart grid."

That's not counting all the lost opportunity costs. With a so-called "smart grid," which allows for more precise control of electricity use, a host of other advances become more practical, such as:
• Expand wind and solar power
• Move to electric cars
• Maximizing energy efficiency

The benefits could be worth up to $2 trillion, EPRI estimates. An MIT study issued today says the grid can probably meet the challenges it faces, but only with regulatory and policy changes that allow it to adapt to the future. So the real question is, when are we actually going to start upgrading the grid and where are we going to get the money for it? The utility industry, which bears the brunt of the investment here, spends about $5 billion a year and that's not enough. The Obama administration recently pledged $250 million in loans, which isn't going to do it either.

Let's not kid ourselves that putting off these air quality regulations, or any regulations, will do anything more than delay the inevitable. The only real uncertainty is how fast the problem hits, not whether it hits or not. So are we willing to spend what it takes now in order to solve the problem we have an emergency on our hands? Or will our leaders continue to procrastinate?

The old line, "pay me now or pay me later" really is true. And later is closer than we might think.

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