Electricity appears to be the currency of the future for economic growth, and this could put Mississippi at an advantage.
Global electricity demand is growing faster than ever, projected to roughly double between now and 2050. Even in the highly developed U.S. economy, growth in electricity demand is expected to require up to 33% increase in energy by 2050. For all types of energy intensive development, mostly manufacturing and IT, it is becoming more and more apparent that new business growth may be limited to the oases capable of accommodating electricity capacity expansion in a relatively short time. Mississippi could and should be an oasis. In the next decade or so, natural gas is the most likely energy source to provide the additional capacity at the scale needed. Longer term, new nuclear capacity makes sense. For Mississippi, seeking and finding ways where energy projects can develop faster and easier here could position the state to attract an outsized share of new business investment over the next 25 years. To commit to planning incredibly long-term, capital-intensive energy projects, companies and lenders need to perceive Mississippi’s regulatory environment as efficient, fair and predictable.
An example of going the wrong direction, a recent report indicated the MS Public Service Commission is considering adding a cog in their process to incorporate an additional consumer advocacy role into proceedings. If done, this will likely add unnecessary bureaucracy and time to the process, decreasing Mississippi’s competitiveness. Historically, measuring by consumer costs, Mississippi has been and remains a lower cost energy location compared to most of the U.S. Electricity in California and New England states is more than twice rates in MS. Adding length and difficulty to regulatory proceedings will increase perceived regulatory risk, thwarting future investment.
Consumer interests are naturally front of mind for both utilities and regulators. Providing good service, competitive rates and high reliability is how utilities compete for industrial growth and new jobs in communities, which looks to be accelerating for Mississippi. Public Service Commissioners are elected by consumers.
Energy systems are quite complicated and very capital intensive. Unlike most business ventures, new generation projects must be considered not in terms of 5-10 year benefits but in 40-50 year benefits. Grand Gulf Nuclear Station may be the best local example. Despite cost overruns and construction delays in the 1980s, the facility is, perhaps, the best, most stable-priced, largest source of electricity serving the metro area.
The role the Public Service Commission plays in laying the foundation for long-term growth is both critical and underappreciated. Through the years and while not perfect, Mississippi has balanced current needs and future planning better than most, as current rates and reliability demonstrate.
Today and going forward, the ability to add electricity supply will be among the top factors affecting Mississippi’s economic growth. As demand for energy increases faster than ever, supplying energy should be an obvious strength for Mississippi. For public policy, that necessitates speeding up, not bogging down.
The Mississippi Energy Institute sponsored this post. MEI Director Patrick Sullivan authored the post.
6 comments:
“Historically, measuring by consumer costs, Mississippi has been and remains a lower cost energy location compared to most of the U.S”
…..Corporations plunder MS for cheap labor and energy costs, oh, and the
tax incentives we give away for “x” number of jobs that never seem to materialize!
I literally just finished watching The China Syndrome. Despite that, I want more nuclear power. I am glad plants are being brought back online from mothballs to power data centers. It’s really time to start a moonshot wffort do double or triple our nuclear power generating capacity.
Man you know if we get “plundered” long enough we may end up with a lot of stuff built like skyscrapers, new sports stadiums, infrastructure, housing developments, and growth. You know? The opposite of a dying state with nothing but thugs and dying boomers. With the only jobs being prisons for the thugs and hospitals for the dying boomers.
I would rather Mississippi be “exploited” with paying jobs than see another factory move to Mexico or China.
Thank you, 6:45.
If you had your way we wouldn't, and shouldn't, have air conditioning either.
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