Dependable, low-cost electricity is essential to keeping the lights on for millions of American family-owned businesses.
It is the type of essential item that touches nearly every aspect of our lives; the bakery relies on ovens, the repair shop on power tools, and the local grocer on refrigeration, and on and on. A consistent and affordable power source ensures that they can operate without interruption and keep prices competitive for their customers despite low margins and a fragile economy. Unfortunately, misguided federal policies now threaten to further disrupt our electric grid and could cause these business to shutter.
In the last several years, the U.S. has rapidly pivoted from a common sense, ‘all-of-the-above’ energy strategy to one motivated by the singular desire to eliminate fossil fuel-generated electricity. That goal of a energy change could even be somewhat defendable if not for the fact that our economy and power grid are clearly not ready for the rushed and reckless transition that federal regulators are rushing.
Like all other areas of the economy, energy markets adhere to the basic laws of supply and demand. Regulators have distorted the sector to force conventional power plants into early retirement, reducing total power generation and increasing prices. The Biden Administration has backed these actions based on the dubious claim that positive incentives for solar and wind projects will allow new arrays and wind farms to fully replace conventional power plants.
But reality eventually catches up, and while regulators been successful at pushing the margins to the point where many traditional power plants are struggling to compete financially, they have failed to create the conditions necessary for the rapid deployment of new technologies to replace these important resources. For reasons ranging from permitting to logistics to expense, thousands of renewable energy projects have been delayed for years, in some cases past the planned retirement dates of the existing plants they are meant to replace. All of this comes at a high cost to family businesses like manufactures which rely on affordable energy to keep their doors open and their workers employed.
Family businesses shouldn’t be made to – and can’t afford – to foot the bill for a haphazard and artificial shift to new and unproven technologies before our grid is ready for it. And while an eventual energy transition is inevitable, recent blackouts in Texas, California, and other parts of the country reveal just how far we are way from that occurring organically. Despite the best efforts of a small group of activist regulators, thermal power generation – coal, natural gas, and nuclear included – remain a critical part of our energy mix.
Small businesses all over the country are hoping that keeping energy prices from further inflation could still be a rare point of bipartisan consensus in Washington. Before the situation worsens, and irreversible harm is done to the backbone of America’s economy, policymakers must realize that abandoning the “all of the above” approach before the country is prepared will result in more business closures and therefore less jobs in our communities.
Palmer Schoening serves as Chairman of the Family Business Coalition.
