COMMENTARY: How to Solve America’s Electricity Crisis – Alex Epstein

My testimony for the House Oversight Committee’s hearing on “Leading the Charge: Opportunities to Strengthen America’s Energy Reliability.”

By Alex Epstein

Below is a video of my spoken testimony and Q&A, along with my prepared remarks, for last week’s House Oversight Committee’s hearing on “Leading the Charge: Opportunities to Strengthen America’s Energy Reliability.”

Introduction

America is in an electricity crisis.

Shortages are now routine throughout the US—and if we don’t start increasing reliable generation very quickly, our grid will get crushed by the exploding electricity demands of AI.

The first step in solving the crisis is to understand it.

At root, our electricity crisis is very simple: government is artificially restricting the supply of reliable electricity—then artificially increasing the demand for reliable electricity.

Government artificially restricts the supply of reliable electricity by destroying, delaying, and defunding reliable power plants.

Here are 5 of the most damaging restrictions on reliable power that need to be reversed.

1. The near-criminalization of nuclear

In the 70s, clean, safe nuclear power became affordable and quickly grew to 20% of American power, with potential to get far more affordable and plentiful.

But crushing, irrational regulation made nuclear expensive or impossible to build.

Congress and the Administration should work to unleash nuclear energy from irrational, pseudoscientific regulations. For example:

The NRC should reject the unscientific “Linear No Threshold” (LNT) model that falsely assumes there is no safe dose of radiation—and replace it with a scientific threshold-based model.
This will remove the number one barrier to safe and affordable nuclear energy in America.
The NRC should rescind the “As Low As Reasonably Achievable” (ALARA) standard, which effectively criminalizes cheap nuclear by mandating never-ending pseudo-safety spending.
This will allow plant developers to offer ultra-safe nuclear to Americans at a competitive price.

Unleashing nuclear is crucial for our medium and long-term electricity future. But it’s not a quick fix. To fix our grid problems as fast as possible we need to address the policies destroying, delaying, and defunding the fossil fuel power plants.

Which brings me to…

2. Forced shutdowns of fossil fuel plants

Given the near-criminalization of nuclear, fossil fuels have been the only way to provide most of the cheap, reliable electricity we need.

Yet EPA keeps passing rules that shut down coal plants and prevent new natural gas plants.

Congress and the Administration should work to set environmental standards based on proper cost-benefit analysis—including the near-infinite cost of an unreliable grid. For example:

The EPA should immediately rescind its GHG emissions standards for power plants, which would effectively ban existing coal plants and new gas plants.
This will prevent an unmitigated grid reliability disaster at a time that we need far more electricity.
EPA should objectively calculate environmental benefits.
EPA justifies grid-destroying policies via absurdly inflated benefit calculations, e.g., claiming to save households $15K a year in health costs. Real benefit calculations will prevent it from imposing huge costs.
EPA also needs to rigorously consider the full cost of policies.
EPA claims that shutting down reliable power plants is virtually costless! If EPA looks at the full cost of policies it will quickly see that power plant shutdowns fail the cost-benefit test.

3. Onerous permitting processes

In addition to outright shutting down and preventing fossil fuel power plants, government also delays them by adding numerous requirements to our already onerous permitting processes—such as quantifying globally trivial GHG impacts.

Congress and the Administration should work to put an end to onerous permitting processes for power plants. For example:

Congress should limit federal agencies’ environmental review of projects under the National Environmental Policy Act to direct and reasonably foreseeable effects of the projects.
This will alleviate the leading cause of delays for critical infrastructure development.
Congress should reduce the scope of EPA’s New Source Review permitting process to the construction of new emission sources and the expansion of existing ones.
This will allow reliable power plants to make upgrades faster in order to stay competitive.

4. Market rules that devalue reliability

Not only does government destroy and delay reliable fossil fuel power plants, it defunds them by creating “markets” that have no price penalty for unreliability! This allows unreliable solar/wind to take money away from reliable plants.

Congress and the Administration should work to require grid regulators to reward reliability and punish unreliability—rather than absurdly doing the opposite. For example:

FERC should establish tech-neutral federal reliability standards requiring grid operators to assign capacity value to electricity sources based on past dispatchability performance, not rosy hopes.
This will improve grid reliability without unfairly preferring any energy source.

5. Subsidies for unreliable power

It’s bad enough that government-controlled electricity “markets” have no price penalty for unreliability, but it’s made far worse by subsidies that pay utilities extra for unreliable solar/wind—driving them to defund reliable power even more.

Congress and the Administration should work to remove or reduce subsidies for intermittent energy whenever possible. For example:

Congress should repeal all the Inflation Reduction Act (IRA) energy subsidies, but above all the “Clean Electricity” subsidies that favor solar and wind.

Forced electrification

Destroying, delaying, and defunding reliable power artificially restricts the supply of reliable electricity, something we can’t afford with increasing AI demand.

And yet government artificially creates even more demand through forced EVs and heat pumps.

Congress and the Administration should work to end forced electrification in its many forms. For example:

Congress should end all the EV subsidies in the Inflation Reduction Act. This will save hundreds of billions of dollars and remove dangerous artificial demand for our grid.
EPA should rescind its deliberately unachievable emission standards for internal combustion engine (ICE) cars and replace them with achievable standards.
This will stop EPA’s illegal partial ban on ICE cars and save consumers and automakers 100s of billions through 2055.

Conclusion

As I said at the outset, our electricity crisis is simple: government is artificially restricting reliable electricity supply, then artificially increasing demand.
The solution, then, is also fundamentally simple: unleash electricity supply and end forced electrification.
In practice, unleashing supply and ending forced electrification requires very specific policy solutions—so I have included dozens of such solutions in my written testimony.
Now is the moment to go from electricity crisis to abundance, and I am eager to help in any way I can.

Here’s a 3-minute video of some of the most memorable exchanges from the hearing.