Plants, Poles and Plugs

Electric Companies Consider Numerous Factors To Determine Their Fuel Mix.
Many factors influence an electric company’s decision to use particular fuels to generate electricity. Chief among them are price, availability, and reliability of supply. Government policies also influence fuel choice, and the mix of fuels used to generate electricity in the United States has shifted over the past 30 years. For example, in the late 1970s—the midst of an energy crisis—new utility power plants were prohibited from burning natural gas or petroleum products to generate electricity by the Powerplant and Industrial Fuel Use Act (repealed in 1987). Instead, decisions were made to build more coal-based power plants.

However, as environmental regulations continued to create uncertainty and high costs for coal-based plants, natural gas emerged as the fuel of choice for new electricity generation in the 1990s. After natural gas prices began to rise early in the 21st century, a renewed emphasis was placed on building new, large baseload coal and nuclear generating plants to respond to growth demands, environmental requirements, and the relatively high cost of natural gas.

The fuel choice of electric companies also depends on whether power plants will be used continuously or only during peak usage times, their environmental impact, and necessary environmental controls.

EPAct 2005 helps preserve a stable, diverse supply of fuels for electricity generation. Provisions within the law substantially increase federal funding for clean coal power initiatives and coal-based gasification technologies; promote the use of nuclear energy; increase natural gas and oil supplies; and promote hydropower and other renewables—all without government mandates as to which fuel must be used.