New NERA Study Details Economic Impact of Clean Power Plan

A new study by NERA Economic Consulting explains the economic impact from increased regulations from the federal government’s Clean Power Plan (CCP) in great detail. The CCP’s goal is to reduce carbon emissions from new and existing fossil-fueled power plants in the United States. States have the responsibility to meet the CPP goals. If they fail to come up with a carbon reduction plan or submit a plan that does not comply with CPP, the federal government steps in with their plan to meet the CPP goals. CPP goals include:

  • All compliance scenarios lead to large reductions in average CO2 emissions.
  • Reductions range from 19% to 21%.
  • By 2031, annual emissions are expected to be 36% to 37% lower than in 2005.

NERA estimates that the impact of the CPP on the energy sector, electricity rates and to the economy include:

  • Total energy sector expenditure from 2022 through 2033 increases range from $220 to $292 billion.
  • Annual average expenditures increase between $29 and $39 billion each year.
  • Average annual U.S. retail electricity rate increases range from 11%/year to 14%/year over the same time period.
  • Losses to U.S. consumers range from $64 billion to $79 billion on a present value basis over the same time period.

State-level average electricity price increases demonstrate that many states could experience significant price increases:

  • 40 states could have average retail electricity price increases of 10% or more.
  • 17 states could have average retail electricity price increases of 20% or more.
  • 10 states could have average retail electricity price increases of 30% or more.

The highest annual increase in retail rates relative to the baseline also shows that many states could experience periods of significant price increases:

  • 41 states could have “peak” retail electricity price increases of 10% or more.
  • 28 states could have “peak” retail electricity price increases of 20% or more.
  • 7 states could have “peak” retail electricity price increases of 40% or more.

Comments (2)

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  1. Pjohnson says:

    The US could quite literally disappear tomorrow and have zero impact on worldwide CO2. For that reason alone, the lunacy of reducing CO2 for the sake of purported anthropogenic climate change should be abandoned. Further CO2 is about politics not science.

  2. Danny Newton says:

    According to the BEA disposable income is the money you have left after taxes. What is needed is another metric for the amount of disposable income left after taxes and regulation. Raising the cost of energy will mean fewer purchase that are subjected to sales taxes. When sales tax income drops the local governments will move to recover the lost revenue, to save the children of course. The government’s appetite for money or price distortion has finally gotten to the point that it is eating its younger siblings at the state county and city level. I see no mechanism that controls what seems to be a perpetual motion machine except bankruptcy.

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