post-top-powermeterA steady reduction in nationwide generating capacity in increasing electricity rates, according to Federal Energy Regulatory Commission member Phillip Moeller. “We are now in an era of rising electricity prices,” he told the Los Angeles Times. “If you take enough supply out of the system, the price is going to increase.”

In fact, electric rates already have increased – by double-digit percentages over the past 10 years, even after adjusting for inflation. If anything, they’ll get worse, says Daniel Kish, senior vice president of the Institute for Energy Research. “The trend line is up, up, up. We are going into uncharted territory,” he predicts.

One reason for that upward trend is unintended consequences of environmental regulations. When the Environmental Protection Agency wrote new rules on mercury, acid and other toxic emissions, they estimated in 2011 that these new limits would cause few coal-generated electric plants to close. But two dozen coal-fired plants across the country are already scheduled to be decommissioned. So when those regulations take effect next year, the power grid will lose some 60 gigawatts of generating capacity – the equivalent of 60 nuclear reactors.

Other generating units are replacing coal with cleaner natural gas. That’s great for the environment, but also costlier. Right now, natural gas costs $4.50 per million BTUs. But the added natural-gas electric generation, along with liquefied natural gas exports and conversion of truck fleets to LNG, will increase demand – and prices along with it. Malcolm Johnson, of the Oxford Princeton Program, predicts they’ll more than double, to $10.

If that weren’t enough, five nuclear reactors have ceased operation over the past few years (mainly because of technical problems), and more shutdowns are under consideration.

When extreme weather, like this January’s polar vortex, increases demand on a reduced-capacity generating system, rates spiral even higher, as the Times notes:

A fifth of all power-generating capacity in a grid serving 60 million people went suddenly offline, as coal piles froze, sensitive electrical equipment went haywire and utility operators had trouble finding enough natural gas to keep power plants running. The wholesale price of electricity skyrocketed to nearly $2 per kilowatt hour, more than 40 times the normal rate. The price hikes cascaded quickly down to consumers. Robert Thompson, who lives in the suburbs of Allentown, Pa., got a $1,250 bill for January. “I thought, how am I going to pay this?” he recalled. “This was going to put us in the poorhouse.”

But you can protect your home or business from the skyrocketing cost of electrical power with a Milestone Solar system. Our customers report electric-bill savings of as much as 50%. The fuel prices will never go up, because the “fuel” rises in the East every morning. There’s no maintenance cost, because there are no moving parts to wear out, and everything’s covered by a 15- or 25-year manufacturer’s warranty. And if another polar vortex comes along, adding a battery backup bank to your Milestone system will give you electric power for days, keeping your key appliances running until the weather gets back to normal.