Editorial: America needs more reliable power
Published in Op Eds
It doesn’t take artificial intelligence to deduce why so many power plants have shut down recently.
Across the country, rising electricity prices are a major concern. This is especially true for states in the Northeast and California. In New Jersey, some residents faced cost increases of around 20 percent last year. Nationally, December power prices were up almost 7% year-over-year. Since 2020, national prices have soared by more than 35%. It’s not just Nevadans who are upset about rate hikes.
The most convenient scapegoat is the explosion of data centers used for AI. While these projects may be the key to the country’s next economic transformation, they face an old-fashioned limitation. They need power — a lot of it.
The nonprofit PJM runs a multistate power market that extends from New Jersey to Kentucky. It believes power demand will increase by almost 5% annually for a decade.
In Virginia, data center companies are interested in building projects that would demand more than 40 gigawatts of power. That’s around twice the capacity that Dominion Energy, the local utility, had in Virginia in 2024.
Normally, high demand might be an incentive to increase supply, stabilizing or even lowering costs. But progressive greens and climate alarmists have sought to shut down coal and natural gas power plants. They’ve pushed states to pass Renewable Portfolio Standards. A RPS requires a state to obtain an increasing amount of its power from green sources. In 2020, Nevada voters approved a 50% RPS by 2030. In 2026, Nevada is required to obtain 34% of its power from renewable sources. In just four years, that will jump to 50%.
In some states, the standard is 100%. States can’t transform their power production this fundamentally simply by building new solar and wind plants. They have to shut down existing coal and natural gas plants. The green alarmists don’t like nuclear power plants, so they’ve been closed, too.
In 2020, power plants within PJM’s service area were “shutting down more quickly than they could be replaced,” The Wall Street Journal reported. “Six years later, that trend has continued even though power demand has risen.”
Unsurprisingly, reducing supply while demand booms has led to higher prices. Even AI can’t defeat the law of supply and demand.
Price controls won’t fix this. If the government artificially lowers the price of a good in short supply, the outcome will be shortages.
America needs to produce more electricity. States should roll back their RPS laws and stop closing reliable power plants until supply rises to satisfy demand.
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