EPA’s rule on carbon emissions will hurt Colorado

By Stuart Sanderson
Guest Commentary

This week, the Environmental Protection Agency is holding a public hearing in Denver regarding its proposed rule for carbon emissions from existing power plants. Even President Obama has acknowledged that the rule will drive up the cost of electricity and your utility bill. Everyone will pay a price for the EPA’s rule.

Not surprisingly, all over the country, rising electricity prices are raising concern. A recent Harris Poll of nationwide consumers found that more than three-quarters of Americans worry that proposed EPA policies to eliminate coal-generated electricity — the most abundant and affordable source — will produce higher electricity prices.

But hardest hit will be states like Colorado that rely heavily on coal for affordable electricity. Coal-based power plants generate about 64 percent of Colorado’s electricity. And the EPA’s rule is coming after them. Previous EPA regulations have already forced 20 percent of the nation’s coal plant capacity to close, pushing the reliability of the power grid close to the edge. The EPA’s new regulation will force utility companies to decide if additional plants are simply uneconomic to upgrade.

Colorado — due to its reliance on clean, high-quality coal — has enjoyed electric rates below the national average. Unfortunately, rates are increasing substantially, the result of mandates for higher-cost energy sources like renewables and natural gas. These rate hikes won’t be the last we will see, as the EPA carbon regulation will eliminate even more coal-based generation, leaving more expensive energy sources to fill the gap.

Some boast that by mandating use of higher-cost energy at the expense of coal-fired generation, Colorado is “ahead of the curve” in complying with the new EPA rule. In fact, the EPA rule will require a 35 percent reduction in Colorado’s greenhouse gas emissions, and there is no indication that it will grant complete credit for the steps Colorado has already taken to force lower-cost fossil fuels out of the energy mix. These policies are already causing significant harm to rural communities and businesses reliant on Colorado’s coal industry, which accounts for nearly 24,000 jobs in the state.

More pain is yet to come. Under the EPA proposal, a complex formula will determine how states meet greenhouse gas-reduction targets. But independent studies using realistic estimates of energy efficiency savings warn of what lies ahead. An analysis by NERA — an independent consulting firm — of the EPA’s regulatory model shows Colorado’s electricity prices could increase by as much as 49 percent. The proposal could also cause the loss of up to 9,000 jobs in Colorado and the West, including those at the mines, which pay wages and benefits in excess of $116,000 annually. Falling coal production on federal lands will also lower by hundreds of millions of dollars the royalty payments that support public schools throughout the state.

Low-income and fixed-income households will be most vulnerable to the EPA’s energy policies. They have little, if any, discretionary income to pay for air conditioning and heat, and will be forced to make tough choices about their families’ most basic needs. That’s why the Harris Poll found worries about the expected hike in electricity bills greatest (88 percent) among retirees and seniors.

The rule will produce nothing in the way of claimed benefits to the environment. According to the EPA’s own analysis, the rule’s impact on climate change is minuscule—a reduction in global warming of less than 1/20th of 1 degree Fahrenheit. Only a Washington, D.C., bureaucracy would find these “benefits” worthwhile.

The EPA doesn’t care how high our electricity bills rise, even if it means putting families and businesses in harm’s way. It’s time to tell the EPA and the Obama administration to stop the war on affordable energy so vital to our state and our nation’s economic welfare.

Stuart Sanderson is president of the Colorado Mining Association.

See article here.