Federal and state policies designed to rapidly decarbonize the US economy will lead already-high energy prices to arise further this summer, according to current and former federal energy officials.
Climate policies, for example, have led to an increasing number of premature natural gas power plant shutdowns and decreased investment in domestic fossil fuel infrastructure development, the Federal Energy Regulatory Commission (FERC) officials told Fox News Digital. Switching too quickly from traditional fossil fuel power generation to wind and solar power also increases the possibility of an unstable grid and widespread outages.
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“Americans are already suffering at the gas pump, and I’m very worried that the combination of extremely high prices and the possibility of blackouts and brownouts is really going to bring home the fact that we have taken our eyes off of reliability, that in our zeal to decarbonize, we’ve lost that critical focus,” former FERC Chairman Neil Chatterjee told Fox News in an interview.
“When I was in FERC, I felt it was my foremost obligation, our responsibility for the oversight of the reliability of the grid,” Chatterjee, who served on the FERC between 2017-2021, continued. “I think that we have prioritized decarbonization over reliability and, sadly, it is going to take catastrophic events to recalibrate things and recentr our focus on reliability.”
The average price of wholesale electricity is expected to increase significantly nationwide between June and August relative to the same period last year, according to the Energy Information Administration (EIA). Consumers in New England alone are expected to pay 200% more for electricity year-over-year this summer.
The Henry Hub futures index, the US benchmark for natural gas prices, showed the commodity trading between $6.85-6.88 per million British thermal units (MMBtu) for the remainder of the summer on Wednesday. The index, by comparison, averaged $3.26 per MMBtu between 2010-2021, according to Federal Reserve data.
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“The Biden administration, from the get-go, has pursued policies to move aggressively away from the fossil fuel generation,” Chatterjee told Fox News Digital. “I’m someone who is excited about the energy transition and believes there are great benefits to Americans from the energy transition, but there are certain folks within the administration who want to skip the transition part of the energy transition, and move dramatically away from the necessary generation that we need.”
“We’re now seeing the consequences of that, both in terms of incredibly high prices that are going to hit consumers,” he said.
Chatterjee added that FERC’s recent natural gas pipeline policy would drive up natural gas prices and harm US electric grid reliability. The commission issued two policy statements requiring an analysis of climate and greenhouse gas emission impacts as part of the federal natural gas pipeline approval process.
FERC commissioner Mark Christie, one of two Republicans on the Democrat commission, said the majority policy is “a huge barrier to developing needed pipeline capacity to take advantage of our domestic resources.”
“The uncertainty resulting from that certificate policy remains a barrier to new investment in pipeline capacity,” Christie told Fox News Digital.
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Christie added that the policy further disincentivizes domestic gas production since companies face roadblocks transporting supply to market. Less supply will lead to higher prices as demand surges during peak summer months.
“Increasing gas production and supply cannot be done overnight and it requires more than drilling, it requires increasing the capacity to transport gas,” he continued. “That takes sufficient pipeline capacity. Pipelines are the only realistic way to transport gas supply in large quantities from American gas fields to consumers.”
“No one will invest in new production if they cannot ship the gas to market,” Christie said.
The FERC commissioner warned that state-regulated utility companies are prematurely shutting down “dispatchable” generating sources — which include natural gas, coal and nuclear plants — leading to capacity shortfalls. About 15 gigawatts of electric generating capacity is expected to be retired in 2022, according to the EIA.
The North American Electric Reliability Corporation (NERC), a federal grid watchdog, concluded in its annual summer reliability assessment that the majority of the country was at a heightened risk of blackouts as a result of lower generating capacity.
“For a number of years, we’ve been slowly changing out our resource mix, retiring older nuclear and coal units, and bringing on just a ton of wind and solar,” John Moura, NERC’s director of Reliability Assessment and Performance Analysis, told Fox News Digital in an interview. “And that is something that’s really good from our aspirations perspective around being able to decarbonize.”
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“But that transition really can’t happen overnight,” he continued. “And building replacement generation and transmission really takes time. So, we really need to work on managing the pace so that we don’t prematurely remove generation that we really need.”
Moura said it is important for the US to maintain dispatchable resources amid its transition to renewable power to ensure grid stability.
“Looking forward, we just see we see more risk,” he added.
Democratic FERC Chairman Rich Glick referred Fox News Digital back to the agency’s press office. An agency spokesperson declined to comment.