Americans take electricity for granted. When we flip a light switch or turn on a television, we expect it to work every time. A resilient and reliable energy grid to deliver affordable electricity is critical for the well-being of society, the expansion of the economy, and the security of the nation.
There are many sources of energy that can power the grid. As a supporter of an all-the-above energy strategy, I believe utility companies should rely on a diverse mix of fuel sources, just as investors rely on diversified stock portfolios to ensure their financial well-being.
Each option has its advantages. Coal-fired electricity is one of the most reliable, fuel-secure and affordable energy sources. This was evident during the 2014 polar vortex, when subzero temperatures strained the power grid. It was the reliable baseload power plants, such as coal and nuclear, that prevented blackouts in many regions of the country. During the bomb cyclone a few weeks ago, many states relied on coal to provide more electricity than any other fuel source.
But federal policies are distorting the energy marketplace in favor of less reliable, less resilient, less affordable sources of electricity. Renewables have received various tax subsidies for the past four decades. Even after the recent tax reform greatly simplified the code, federal taxpayers continue to provide heavy subsidies for less dependable and more expensive sources of electricity. The Joint Committee on Taxation estimates that tax subsidies for renewables will total more than $36 billion from 2016-20. The result is an unlevel playing field that gives an advantage to fuel sources subsidized by federal taxpayers.
Since 2010 more than one-third of the nation’s coal-fired power plants have shut down or announced plans to close. That’s equivalent to shutting down the entire electricity supply of Indiana, Ohio, Illinois and Kentucky combined. Thirty-nine coal-fired electric generating units have been forced to close in the Hoosier State alone. Federal and some state policies put coal-fired generating plants at a disadvantage in the energy marketplace and make it more difficult to keep them running and providing reliable and affordable energy to American consumers.
Ideally, these distorting taxpayer subsidies would not exist, letting market forces determine which sources of energy utility operators select. But they do. To help ensure Americans continue to enjoy reliable and affordable electricity, Congress must level the playing field.
That is why I am introducing the Electricity Reliability and Fuel Security Act, which would create a tax credit covering a small portion of the costs to operate and maintain existing coal-fired power plants. My proposed credit would last only five years, in contrast to 40 years of subsidies for renewables. This temporary tax credit is necessary to avoid more coal retirements while Congress, the Energy Department, the Federal Energy Regulatory Commission, grid operators and the North American Electric Reliability Corp. continue working together to ensure that the nation’s electricity grid remains both reliable and resilient.
America’s economic and national security—not to mention the daily lives of its people—depend on the availability of reliable and affordable electricity. The Electricity Reliability and Fuel Security Act will continue to ensure that when Americans flip that switch, they don’t have to wonder whether the lights will come on.
a Republican, represents Indiana’s Eighth Congressional District and is a member of the House Energy and Commerce Committee.