THE COST TO GET CLEANER: A study sponsored by an energy group warns that 43 states will see double-digit increases in electricity prices in the next decade if the EPA’s Clean Power Plan is enacted.
By Rob Nikolewski │ Watchdog.org
The Obama administration and theEnvironmental Protection Agency is on the verge of instituting a Clean Power Plan that would mark the first federal measure to regulate carbon dioxide emissions from the nation’s existing power plants.
The EPA says the new rules will save money in the long run, but a recent study comes to a much different conclusion — estimating that 43 states will see their electricity prices increase by double-digits in the next decade, with 14 states having peak-year increases of more than 20 percent.
“You see no benefits from spending all this money and it’s driving up energy prices for families,” said Paul Bailey, senior vice president for federal affairs and policy at the American Coalition for Clean Coal Electricity, an industry group opposed to the proposed rules.
The group also questions whether the new rules will make any discernible difference in reducing the effects of climate change.
It’s another chapter in a long-running debate that has raged since the EPA announced the proposals last June, aimed at reducing CO2 emissions 30 percent by 2030.
EPA critics question whether the Clean Power Plan is the best way to balance economic realities with potential public health benefits while industry and political leaders in energy states such as coal-rich West Virginia accuse the EPA of overstepping its bounds by using the Clean Air Act to enforce the new rules on individual states.
The regulations would govern the estimated 2,417 fossil-fuel-fired power plants in the United States that account for 39 percent of the nation’s CO2 emissions — the largest single source.
NERA Economic Consulting, an economic research firm based in Boston, estimated it would cost between $366 billion and $479 billion over the next 15 years to fully comply with the new regulations, with many of those expenses passed on to energy consumers.
After crunching the numbers for all 50 states plus the District of Columbia, NERA estimated that ratepayers in every state will see electricity prices go up under the EPA regulations during 2020-2029 and that all but seven will see prices rise by 10 percent or more.
During peak years — when electricity usage is at its highest — the NERA study predicts that consumers in 14 states will see potential increases of more than 20 percent.
Utah and Wyoming are two of the hardest-hit states, with the study predicting that Utah ratepayers may see a 24 percent average increase in the next decade, with a potential 26 percent peak-year spike. Wyoming could see a 22 percent average increase, with as much as a 26 percent peak-year increase.
Here are the NERA estimates for all 50 states:
“This will really hit low-income people especially hard,” Bailey said, pointing to data showing that families with pretax earnings of less than $30,000 spend a disproportionate amount on energy expenses.
In a report released last month, the ACCE took the NERA data and broke them down to come up with estimates for the costs and impacts on families in each of the 50 states.
EPA defends its plan.
“The Clean Power Plan will maintain an affordable, reliable energy system, while cutting pollution and protecting our health and environment now and for future generations,” the agency says on its website, and emphasizes the Clean Power Planoffers states flexibility to devise “building blocks” to meet emissions reductions.
Critics of the NERA study point to the fact it was paid for by the American Coalition for Clean Coal Electricity and endorsed by other industry groups, including the American Fuel and Petrochemical Manufacturers and the National Mining Association.
“This information has been used in congressional hearings, it’s been used on the floor of the House and the Senate, it’s pretty solid information,” Bailey said.
Related: EPA carbon plan will kill 38,000 Virginia jobs, report says
The EPA insists the Clean Power Plan will be a net plus for public health as well as the economy.
“Every dollar invested in the Clean Air Act returns $4 to $8 in economic/health benefits,” the agency said in an email to Watchdog.org. “Utilities are already investing in clean energy and EPA’s proposed rule propels that ongoing progress.”
The statement echoed remarks made by EPA Administrator Gina McCarthy when the plan was unveiled, saying the new rules will deliver up to $90 billion in climate and health benefits by 2030. When it comes to soot and smog reductions, “for every dollar we invest in the plan, families will see $7 dollars in health benefits,” McCarthy said.
“When states take advantage of energy efficiency — when the effects of our plan are in place in 2030, average electricity bills will be 8 percent cheaper,” the EPA statement went on to say.
Earlier this month, Nature Climate Change, a monthly peer-reviewed scientific journal that researches global warming, came out with its own study on the EPA power plant standards and touted the regulations’ benefits.
The Nature Climate Change study looked at three different scenarios and advocated adopting a “stringent but flexible policy” emphasizing demand-side energy efficiency — that is, instead of adding more generation to the system, getting utilities to pay energy users to reduce consumption.
But a spokeswoman for the the American Coalition for Clean Coal Electricity rapped the NCC study, saying its researchers ignored that coal makes up about 40 percent of the nation’s electric power.
“While these academics are hypothesizing about unproveable consequences, what’s known is that families are struggling to pay their monthly bills and companies are struggling to stay in business — and any increase in energy costs will burden them unnecessarily,” said Laura Sheehan, senior vice president for communications.
Opponents of the Clean Power Plan claim the expense from the EPA’s rules won’t make much difference in the climate, pointing to analysis from another EPA rulemaking that CO2 concentrations would be reduced by less than 0.5 percent, that global average temperature rise would be reduced by less than two-one hundredths of a degree and sea level rise would be reduced by 0.3 of a millimeter — the thickness of three sheets of paper.
“These numbers are sort of like kryptonite for the EPA,” Bailey said in a telephone interview. “They do not like to admit that the Clean Power Plan will have no effect on global climate change.”
“We know that acting on climate isn’t just a moral responsibility we must accept — it’s an economic opportunity we can seize, to sharpen our competitive edge, create jobs, strengthen international ties, and catalyze global action,” the EPA statement to Watchdog.org said.
The Clean Power Plan looks to push power plants to transition from coal to cleaner sources of energy and the NERA study predicts it will lead to coal generation dropping by 29 to 71 percent.
Two coal companies and 14 states are challenging the EPA in court, saying the agency lacks the authority to issue the regulation and is overstepping its bounds by treading on ground previously reserved for the Federal Energy Regulatory Commission and individual states.
But public utility commissioners, environmental and energy agency leaders in 14 other states have come out in support of the EPA.
The final regulation for existing power plants is before the EPA while the final rule for new plants is currently before the Office of Management and Budget. The EPA is expected to sign off on the ruling for existing and new power plants this summer.
(Clarification: An earlier version of this story incorrectly described the status of final rules for existing and new power plants. It has since been corrected.)