Tag Archives: clean power plan

Utah Joins Oklahoma in Rejecting Clean Power Plan

The state of Utah has now joined Oklahoma in outright rejecting complying with the Clean Power Plan after the Supreme Court halted the regulations earlier in February. Utah was already a member of a coalition of 30 states challenging the EPA’s Clean Power Plan in the D.C. Circuit Court of Appeals. Under the plan, all states are required to come up with their own carbon emission reduction goals or have federal goals imposed on the state. It directs states to lower their greenhouse gas emissions by a third by 2030, specifically targeting the coal industry. An outright rejection may be viewed as the state is unwilling to come up with their own goals, thereby requiring the federal government to interfere in each state’s coal industry and electricity production.

Groups suing the agency say is an impossible goal that will raise energy prices and raise the potential for rolling blackouts. In addition, a study by NERA Economic Consulting concluded that:

The EPA has severely underestimated the cost of compliance with its regulation of carbon dioxide from power plants, and by doing so it is trying to make Americans believe that the government can force the electric generating sector to eliminate a massive amount of low-cost coal-fired generation for little or relatively no cost. U.S. consumers of electricity will pay for prematurely retiring coal-fired plants through substantially higher electricity prices. Because EPA has set emission reduction targets by state, the impact of the higher costs will not be borne equally, but 40 states (out of 47 affected) could see average electricity prices rise by 10 percent or more and 27 states could see average electricity prices increase 20 percent or more.

With the recent Supreme Court decision to stay the implementation of the Clean Power Plan, other states say they will continue to work on complying with the plan. EPA senior officials have said they will meet with any states that wish to voluntarily continue working on the regulations.

 

Supreme Court Ruling Temporarily Helps Coal Industry

The Supreme Courts’ recent ruling temporarily holds off increased regulations on the coal industry. The administration’s stricter coal plant rules, which call for a phased-in 30-percent reduction in emissions by 2030 will be based on a state-by-state voluntary basis.

According to Environmental Protection Agency (EPA):

We will continue to provide tools and outreach. But we clearly understand that the courts will be winding through the process of looking at that rule. The [Supreme Court’s ruling] means that it’s going to take a little longer for that to happen. We will respect that, but in the meantime we’re going to continue to address greenhouse gases with the authorities under the Clean Air Act that are available to us today.

The Clean Power Plan requires very strict environmental controls to limit emissions from power plants. Twenty-seven states and a group of industry advocacy organizations challenged the new plan at the Supreme Court. The coalition of states and industry asked the Supreme Court to allow them to hold off on implementing the Clean Power Plan until after the Supreme Court has ruled on its legality. The Supreme Court granted a stay on the Clean Power Plan, giving hope, for now, to the coal industry and its allies.

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.

Clean Power Plan Opposition Grows

A coalition of 24 states and a power company are suing to stop the Obama administration’s Clean Power Plan (CPP), calling it an unlawful federal bid to control state power grids.

As part of the lawsuit, the states seek to place a hold on the Clean Power Plan’s deadlines for meeting its carbon emission goals, which supporters have described as necessary to improve air quality but foes have criticized as arbitrary and unrealistically strict.

In addition to the lawsuit by the states, pro-business groups have also joined the fight against the Clean power Plan that mandates a massive reduction in carbon emissions in the next 15 years, arguing that it will jack up energy costs and slash jobs without making a dent in greenhouse gases.

U.S. Chamber of Commerce and 14 other business groups filed a lawsuit against the Environmental Protection Agency. Their lawsuit:

  • Claims the EPA has overstepped its authority by attempting a takeover of state power plants.
  • Seeks a hold on the rule’s implementation pending the legal challenge.
  • Parallels the lawsuit filed same day by 24 states.

The Rule requires a fundamental restructuring of the power sector, compelling States, utilities and suppliers to adopt EPA’s preferred sources of power and fuel and to redesign their electricity infrastructure in the process.

A preliminary analysis of the Clean Power Plan issued in October, 2014 by the NERA economic consulting calculated that the CPP could boost retail electricity prices 12 percent to 17 percent.

The Clean Power Plan would effectively shut down coal-fired power plants, which provide inexpensive and reliable electricity but cannot reduce their emissions to the required levels using current technology.

Thousands of businesses will stop providing support services to coal-fired plants and coal mines. Many coal mines will have to reduce operations or close entirely, laying off numerous employees in the process.

The Real Cost of Clean Power Plan

The Environmental Protection Agency’s Clean Power Plan Proposed Rule to cut carbon emissions from power plants, specifically targets coal power plants. Not only would this hurt United States energy supplies, but also greatly increase energy costs that would hit consumers by raising their electricity bill.

The following shows the difference between the analysis of the costs of the National Economic Research Associates and the Environmental Protection Agency (EPA).

The EPA estimates:

Annual cost estimates for complying with the Clean Power Plan range from $5.4 billion to $7.4 billion in 2020, to $7.3 billion to $8.8 billion in 2030. These annual cost estimates factor in both the costs of investments in transitioning to lower-carbon electricity options and the savings that result from investments in energy efficiency.

NERA estimates:

EPA’s Clean Power Plan could cost consumers and businesses a staggering $41 billion or more per year, far outpacing the costs of compliance for all EPA rules for power plants in 2010 ($7 billion) and the annual cost of the Mercury and Air Toxics Standards rule ($10 billion). The analysis also finds that additional coal retirements would total 45,000 megawatts or more of coal-based electricity, posing a major threat to electric reliability in many parts of the country.

Energy Security Must Include Reliable Power

A similar version of this blog post appeared in Newsmax:

Unlike populations in most other parts of the world we Americans take vital benefits of dependable electricity for granted. We simply plug into an outlet or flip on a switch and fully expect that our lights will go on, our computers will charge, our coffee will heat up, our air conditioners will function, and yes, our generous taxpayer subsidized plug-in vehicles will run again until tomorrow.

This wonderful, finely balanced round-the-clock empowerment required planning and development which didn’t occur overnight. The same will be true of future efforts to restore adequate capabilities after the Obama EPA’s Clean Power Plan takes an estimated one-third of all U.S. coal-fired plants off the grid over the next five years. This amounts to a loss of generating capacity sufficient to supply residential electricity for about 57 million people.

The North American Electric Reliability Corp, a nonprofit oversight group, emphasizes that the plan constitutes “a significant reliability challenge, given the time required for implementation.” The timeline to convert or replace a coal-fired power plant with natural gas requires years, whereby siting, permitting and development to meet EPA’s interim target would need to be completed by 2017.

Even if a state were able to submit a compliance plan by 2017 or 2018, EPA has admitted that it may take up to another year to approve it. New and upgraded natural gas plants will require additional pipeline infrastructure which may take five years or longer. More expansive transmission lines will also be required to connect that capacity to the grid, with full implementation potentially taking up to 15 years.

EPA’s latest climate alarm-premised war on coal assault calls for states to cut CO2 emissions by 30 percent from 2005 levels by 2030 despite satellite-recorded flat mean global temperatures over the past 18 years and counting. This federal usurpation of state responsibility dating back to the invention of the modern steam engine in the 1880s is unprecedented.

A “finishing rule” expected to be issued in June or July will require states to meet agency carbon-reduction targets by reorganizing their “production, distribution, and use of electricity.” In complying, 39 states must achieve more than 50 percent of EPA’s reduction targets by 2020.

Not only are EPA’s mandates unfeasible, they also demand that states operate “outside the fence line” to force shut-downs of coal (and eventually natural gas), establish minimum quotas for renewables (wind and solar), and impose energy conservation mandates. Never mind here that last year the D.C. Court of Appeals ruled against the Federal Energy Regulatory Commission’s claim of authority over “demand response” of the national energy grid.

Even liberal Harvard constitutional authority Larry Tribe has observed being stunned at this effort to nationalize U.S. electricity generation by coercing states to pass new laws or rush through new compliance rules that exceed EPA’s legal jurisdiction. President Obama is clearly eager for such policy changes to be quickly put into effect which a future Republican president can’t reverse. This will also provide bragging rights for a climate initiative he can announce at the Paris climate conference later this year.

Fortunately, while states are invited to draw up implementation plans for EPA approval, they really have no legal obligation to do so. And while EPA can attempt to commandeer a federal plan if states resist, there are good incentives for them to band together in calling EPA’s bluff — reasons which can otherwise bear dangerous and costly consequences.

An April 7 Washington, D.C., power outage caused by a mechanical failure and fire at a transfer station temporarily disrupted electricity to the White house, Capitol, government agencies (yes, including the Energy Department), businesses/residents, and street lights. While relatively minor, it most likely could have been avoided if a 60-year-old coal-fired plant called the Potomac River Generating Station in Alexandria, Va., which provided backup capacity to balance the grid, hadn’t been shuttered.

It was one of 188 plant closures credited to former New York City Mayor Bloomberg’s activist “Beyond Coal” campaign which he has supported with $80 million in donations to the anti-fossil Sierra Club.

A far more damaging 2003 Northeast blackout resulted in costs of about $13 billion. Referring to the Clean Power Plan, the New York Independent Systems Operator (NYISO) now reports that EPA’s “inherently unreasonable” reductions “cannot be sustained while maintaining reliable electric service to New York City.” NYISO further projects unacceptable plan consequences which “no amount of flexibility can fix.”

States should collectively heed this reality. Rather than accept EPA’s dirty work, it’s imperative that federal hijacking of state sovereignty be resoundingly rejected.

Clean Power Plan Regulations have High Expectations

Advanced Energy Economy (AEE) has come up with a number of recommendations for the Clean Power Plan. The AEE sees these new federal regulations as a great benefit to the electric power system and an added opportunity to the energy industry. Here is a brief summary of AEE’s recommendations for the Clean Power Plan:

Part of the problem is simply the difficulty of predicting the technological progress that will take place by 2030 and beyond. For this reason, we called on EPA to regularly review and revise its emission targets given the steady improvement of advanced energy technologies, which will enable greater emission reductions over time.

Besides ways to strengthen the targets associated with advanced energy, we also urged EPA to take several actions to encourage the use of advanced energy technologies by states.

One way to do this is to explicitly approve more emission-reducing technologies for compliance. We called on EPA to expand the range of options to include the 40 technologies described in AEE’s Advanced Energy Technologies for Greenhouse Gas Reduction. The full report is available here.

In order to avoid uncertainty on the part of states about eligible technologies and how to incorporate them into compliance plans, EPA needs to clarify the crediting of emission reductions from renewable energy and energy efficiency actions in a variety of ways. Specifically, we urged EPA to develop a non-exclusive list of protocols for evaluation, measurement, and verification (EM&V), so that states could employ energy efficiency in their compliance plans with confidence.

We also asked that EPA provide clarity as to the crediting of renewable energy across state lines, in order to encourage the continued expansion of interstate markets. EPA should also improve the crediting of energy efficiency investments in states that are energy exporters, as well as clarify the crediting of emission reductions that occur in one state as a result of efficiency investments made in another state.

Finally, AEE urged EPA to accelerate advanced energy markets, and their associated emission reductions, by crediting emission reductions achieved prior to 2020 by new projects stemming from state compliance plans.

In sum, we are urging EPA to build upon the solid foundation of the Clean Power Plan by making changes in the final rule to fully realize the benefits of advanced energy technologies for emission reduction and economic growth. With the formal comment period open until December 1, we hope other supporters of a better energy future will do the same.

How do you feel about the Clean Power Plan and about AEE’s recommendations?

Has the EPA Hurt the Economy?

Last week, the EPA held public hearings on its “Clean Power Plan” proposal — a regulation that, unsurprisingly, sounds a lot better (who doesn’t want clean power?) than it actually is. The regulation won’t just cut greenhouse gas emissions from power plants (with a miniscule temperature impact of just 0.018 degrees Celsius by 2100), it will cut jobs while raising energy prices for families across the country.

Over at the Daily Signal, Nicholas Loris of the Heritage Foundation pointed out that EPA Administrator Gina McCarthy has written a post on the EPA’s website about the public hearings. According to McCarthy: “We expect great feedback at these sessions. And unfortunately, we also expect a healthy dose of the same tired, false and worn out criticism that commonsense EPA action is bad for the economy.” So, it’s simply false that EPA action hurts the economy. Want proof? McCarthy offered up some slam-dunk evidence: “Just look at our history: since EPA has existed we’ve cut air pollution by more than 70 percent, while GDP has tripled.”

If that’s the same type of analytical rigor that the EPA uses when churning out regulations, no wonder the agency continues to label job-killing restrictions that hike consumer prices “commonsense.”

Never mind that a Chamber of Commerce report projects $51 billion in annual economic losses from the Clean Power Plan rule through 2030 — not to mention 224,000 annual job losses.

  • Or that the EPA’s analysis predicting that its rule will cause job gains largely anticipates those gains because power plants will have to purchase renewable energy equipment thanks to the EPA rule.
  • Or that the EPA’s analyses of employment impacts routinely use flawed models that only partially assess economic costs.
  • Or that more than 34 gigawatts of electric generating capacity are retiring due to just two EPA regulations, costing jobs and raising energy costs along the way.
  • Or that a moderate projection from the National Association of Manufacturers finds that just six EPA regulatory proposals from 2010 and 2011 could cost 2 million jobs and $100 billion annually.
  • Or that its energy regulations disproportionately hurt the poor, who spend more of their incomes on energy.

And these are just a handful of recent EPA rules. To most readers, that might sound like the agency is not exactly helping the economy — in fact, that the agency is doing quite the opposite. But never mind all of that. Because, according to the agency, the fact that the United States has grown since the EPA’s inception must be evidence that the EPA has done nothing but promulgate commonsense regulations; certainly, it cannot be the case that the economy has grown in spite of them.

If you read any of the EPA’s regulatory impact analyses, you’ll see that their regulatory benefits are often those of job creation by regulation (i.e. their rules impose costs on one industry by requiring that industry to spend money, thereby spurring growth in another industry) — hardly a solid growth principle. If government-mandated expenses and restrictions created jobs and economic growth, we’d have regulated ourselves into prosperity quite effortlessly over the last six years.

McCarthy’s logic makes just as much sense as saying that you’ve eaten Oreos for lunch every day for the last week while maintaining a healthy weight — therefore, Oreos have clearly had no negative impact on your health.

The fact that growth has occurred in the face of overreaching regulations is hardly evidence that those regulations haven’t hurt the economy.

According to a study published in the Journal of Economic Growth last year, federal regulation from 1949 to 2005 has cost the American economy an average of 2 percentage points of growth. Altogether, by year-end 2011, regulations since 1949 had reduced American GDP by $38.8 trillion.