WHAT’S HAPPENING TODAY: Good afternoon and happy Thursday, readers. In today’s edition of the Daily on Energy, Callie and Maydeen dive into energy topics such as rising electricity prices and warnings by Federal Energy Regulatory Commission’s David Rosner about the stability of the national grid. We also include details about plans to shut down one of the largest coal plants and Exxon Mobil’s plan to expand carbon capture. Hurricane Milton hit landfall Wednesday evening at around 8 p.m. as a category 3 hurricane, leaving millions without power. For today’s election countdown, we take a look at Florida’s Senate race between Sen. Rick Scott, a Republican, and former Democratic Rep. Debbie Mucarsel-Powell.
Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
ELECTRICITY PRICES RISING FASTER THAN OVERALL INFLATION: While overall inflation is at its lowest rate (2.4%) since February 2021, electricity prices have risen steeply over the past year, the Bureau of Labor Statistics said Thursday.
The details: In the most recent Consumer Price Index Summary, the bureau revealed that electricity prices rose 3.7% for the year ending in September. Month-to-month, electricity prices were up 0.7%.
What people are saying: The Electricity Transmission Competition Coalition estimates that Thursday’s report marks the 21st time electricity price inflation has outpaced the CPI out of the last 28 reports.
“Electricity price inflation is a policy failure – not a market failure,” chair Paul Cicio said. “Electricity prices will continue to escalate due to tens of billions of dollars being spent on electricity transmission projects that are not competitively bid, a policy that monopoly utilities oppose to increase their profits. Without competition, utilities do not have an incentive to reduce transmission costs. Competitively bid projects routinely reduce costs by 25-30 percent.”
Decreasing across the board: Despite the increase, the energy index overall (including electricity, fuel, and gas) dropped 6.8% over the last 12 months. Additionally, year-over-year electricity inflation rates are dramatically lower than what they were during peak inflation in June 2022. At the time, annual electricity price inflation was around 13.7%.
This comes as a big win for the Biden administration heading into the November election, as energy prices, such as the cost of gas at the pump, remain top of mind for voters. As of Thursday, the average price of gas nationwide was $3.212 per gallon, down from $3.682 one year ago.
A GRID ‘IMBALANCE PROBLEM’: The Federal Energy Regulatory Commission’s Rosner is echoing the warnings of top industry players and utility operators over the national grid as increased demand threatens its stability and reliability.
Key quotes: “We’ve got a supply and demand imbalance problem, right? And I’m interested in anything that can help move that in a different direction,” Rosner said Thursday. The commissioner expressed interest and support for permitting reform legislation being considered in Congress as a way to relieve stress on the grid by speeding up the time it takes to develop more transmission.
“On the question of how long it takes to build things writ large, I think the answer is, it takes way too long,” Rosner said. “I mean you can see there have been some very exciting electric transmission projects that are just getting either under construction or operational this year, last year – that if they were people, they’d either be old enough to drive or older enough to vote – and that’s not the time scale that we need to solve the demand problem, the reliability problems that we face today.”
Some details: Rosner’s remarks came during the 2024 Grid Forum hosted by the American Council on Renewable Energy, which focused on solutions to secure the ever-straining electrical grid. The commissioner first joined FERC in June 2024 and is set to serve through June 2027.
A bit of background: PJM Interconnection, the largest grid operator in the country, warned of a supply and demand imbalance earlier this year when it dramatically raised its rates for next summer. PJM pointed to the decline of power sources like coal and the rapid increase in demand from large facilities like data centers that renewables have yet to keep up with. Several former FERC commissioners previously told the Washington Examiner that as this demand from data centers is expected to grow even more – using upwards of 9% of electricity generated in the U.S. by 2030 – the grid remains unprepared.
BOOMING ENERGY DEMAND: Some projections now indicate that the unprecedented energy demand driven by data centers will surpass supply in just years.
The details: Global management consultancy firm Bain & Company said in a report today that it now estimates energy demand could outstrip predicted and historical energy generation growth sooner than 2028.
If the high-end demand scenario predictions come true, data centers are projected to make up the plurality of this demand growth, with 44% of electricity load growth in 2028. Commercial, manufacturing and residential are expected to make up another 47% combined.
To meet this demand, Bain estimates that utility companies in the U.S. will need to increase energy generation every year by between 7-26% compared to 2023’s total. This is a steep hill to climb, as the consultancy group said the current largest five-year generation boost seen in the U.S. was 5% from 2005 through 2023.
However, Bain estimates this can be done through increased investments generating an additional 10-19% in annual revenue for utilities. The report also said this could increase customer’s energy bills by 1% every year through 2032.
COAL PLANT CLOSURE: One of the largest coal-powered plants in the United States is reportedly set to close or be repurposed in just seven years.
The details: The James M. Gavin plant in Cheshire, Ohio, is preparing to retire the 2,600 megawatt coal-powered facility by 2031, sources familiar with the plans confirmed to Inside Climate News. The 50-year-old plant may also be converted to run on a different fuel source.
The official announcement on the possible closure is reportedly set to come in tandem with a pending sale of the plant. Lightstone Holdco, which owns the Gavin plant, plans to sell to investment firm Energy Capital Partners.
A reminder: The federal government is currently working toward ending coal-power generation. During last year’s United Nations Climate Change Conference (better known as COP28), the U.S. joined the Powering Past Coal Alliance committing to phase out coal emissions by 2030.
EXPANDING CARBON STORAGE: Exxon Mobil announced today that it has secured the largest offshore carbon dioxide storage site in the United States, increasing its carbon capture network.
The details: The oil and gas giant has secured a lease for additional offshore CO2 storage in Texas waters, stretching more than 271,000 acres. Terms of the agreement are expected to directly benefit the Texas Permanent School fund, increasing investments in childhood education. Exxon has not said how much the lease cost.
Exxon has championed itself as a leader in capturing and storing carbon, having captured a cumulative 120 million metric tons of CO2, according to its website. The company has said this is roughly 40% of all CO2 captured.
Key quote: “This is yet another sign of our commitment to CCS and the strides we’ve been able to make,” Dan Ammann, president of ExxonMobil Low Carbon Solutions, said. “With our growing roster of customers ready to deploy CCS, we’ll be driving substantial emissions reductions along the Gulf Coast through a comprehensive solution that includes capture, transportation, and storage—capabilities that make us a clear leader.”
THE LATEST ON HURRICANE MILTON: More than 3 million homes and businesses are without power in Florida after Hurricane Milton made landfall in the Sunshine State as a category 3 storm around 8 p.m. Wednesday night.
The damage so far: The hurricane dumped more than 17 inches of rain in St. Petersburg, which saw several flash flood warnings issued. Severe winds caused a crane to collapse into a building in the city that houses the Tampa Bay Times. Luckily no one was working inside the newsroom at the time of the incident.
Milton’s winds also ripped off the roof of the massive domed MLB stadium for the Tampa Bay Rays. Photos and videos show cities throughout southwestern Florida severely damaged by the storm, with streets flooded, trees and powerlines downed, as well as homes completely ripped apart. Some winds were so strong that a boat was pushed into a home. Approximately 3,223,091 homes and businesses had no power Thursday afternoon, per Poweroutage.us.
Fatalities: As of around 3 p.m. Thursday, at least 12 people were confirmed dead as a result of Hurricane Milton, according to NBC News. Around five individuals were killed in tornadoes reported in St. Lucie County, while several others died due to falling trees. In some cases, the cause of death was still pending.
Call to Congress: President Joe Biden urged Congress to return from recess on Thursday in order to approve emergency funding for disaster relief. “I think the congress should be coming back and moving on emergency needs immediately,” Biden said, adding that he had not yet spoken to House Speaker Mike Johnson. Congress isn’t scheduled to return until after the November election.
A spokesperson for Johnson told the Washington Examiner via email that “Congress will act again upon its return in November to address funding needs and ensure those impacted receive the necessary resources.”
CLIMATE ACTIVISTS INTERRUPT MATTHEW YGLESIAS: Climate change activist group Climate Defiance yesterday interrupted the Abundance Conference 2024, featuring Matthew Yglesias, a Bloomberg columnist and blogger.
The activist called out Yglesias for his blog post “Harris is right on the merits about fracking,” in which he wrote that the U.S. should not ban fracking because it produces oil and gas, “valuable commodities.”
“We are here to call you on your stance on fracking,” a Climate Defiance member said at the event. The activists posted the protest to X today, tweeting, “It is obscene that fossil fuel shills get honored by the Beltway Insiders as climate catastrophes charge towards our shores. We are ready and willing to stop this madness.”
ELECTION COUNTDOWN: As Florida is reeling from the effects of Hurricane Helene and now Milton, eyes are on Scott’s reelection race against Mucarsel-Powell.
Scott served as Florida’s governor from 2011 to 2019. He was then elected to serve as senator of Florida in 2018. Mucarsel-Powell served in the House from 2019 to 2021.
Mucarsel-Powell has criticized Scott’s efforts to address climate change. Mucarsel-Powell on MSNBC last week called Scott a “fraud” and “extremely dangerous,” citing allegations that as governor, Scott banned the term “climate change” for state agencies, which he has denied.
Scott’s press secretary, Jonathan Turcotte, told the Washington Examiner via email, “Protecting Florida’s environmental treasures is one of the few areas where there’s bipartisan agreement in our state, so it’s sad to see Debbie and the Democrats try to politicize this in the midst of a crisis in our state.”
“The climate is changing, and that’s why Senator Scott made important investments to take care of the environment and address rising sea levels and other impacts as Governor,” he added.
On Mucarsel-Powell’s campaign website, it stated that she vows to build climate-resilient infrastructure in Florida. It added “Debbie knows climate change is real and she is ready to take action to address the climate crisis that is impacting Floridians, their lives, and their property.”
Florida is increasingly a red state and the most recent polls suggest that Scott leads by 2 points against Mucarsel-Powell. This year, there are 34 Senate races. The Democrats hold a slim majority in the Senate and in order to flip the Senate, Republicans need to gain two seats – if former President Donald Trump does not win the White House.
There are 25 days until election day.
RUNDOWN
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