AEP President Warns of Volatile Gas Prices, ASCE Paper on U.S. Grid Vulneribility
American Electric Power (AEP) President Nick Akins spoke to the Chamber of Commerce last Wednesday. He warned that natural-gas prices, which are hovering around $2 per 1,000 cubic feet, could surge and undercut the current rational behind increased reliance on natural gas. Poining out the past volatility in the price of natural gas, I quote Akins, “Betting on just one fuel to power our energy fuel isn’t smart. Whether that volatility has changed permanently remains to be seen." Coal makes up a major portion of American Electric Power's (AEP) generating capacity, but low natural-gas prices and new EPA air pollution regulations have driven AEP to diversify its fuel mix. AEP has said it will retire more than 5,000 megawatts of coal-fired power, switching to natural gas and other fuel sources.
The American Society of Civil Engineer (ASCE) released their latest report on the current state of the United States electric grid system. This special report described the nation’s electrical grid as a patchwork system that ultimately will break down unless roughly $673 billion is invested in it by 2020. A staggering piece of information from an organization that is not prone to exaggeration. However, some believe that fixing our grid system is a possibility. The Honorable Curt Hebert, Jr., a highly thought of former FERC Chair, states the good news is that private capital is available for investment in electrical infrastructure. He says the money is sitting on the sidelines because we haven’t inspired anybody to get out there and build this infrastructure in a way that they might believe there’d be a return on their investment.