Coal company says it plans to raise prices and trim production to compete
Posted On August 9, 2021
An electric utility in northern Ohio says it will hike electricity prices by as much as 30 cents per kilowatt hour next year to offset the cost of producing more coal, amid a slump in the industry.
The Ohio Public Service Commission said Tuesday that electric utilities across the state will have to raise power prices by 20 percent or more to offset a $200 million cut in coal use in the next year.
Coal company FirstEnergy said Tuesday it will raise its average price of electricity from $.16 per kilogram to $.18 per kilo, with a 10-cent increase in 2018.
Energy and Natural Resources Commissioner Bill Clements said that without additional support from the federal government, Ohio could see another year of decline in coal production.
“We’re not going to be able to absorb that cost without additional federal funding,” Clements told reporters.
“We’re going to need more federal assistance.”
Coastal power plants and pipelines are the most vulnerable to rising costs because they provide the most energy to the grid.
At the same time, new power plants are being built on the U.S. West Coast that are also expected to have a lower capacity factor and less demand than those built in the Northeast.
While the energy sector has experienced a resurgence in recent years, the cost for the nation’s energy infrastructure has continued to climb, particularly for power plants, and consumers are paying for it.