Costly Clean Power Plan a Bad Deal for State
The Supreme Court just hit the brakes on President Obama’s climate agenda.
The court’s stay of the Clean Power Plan, the U.S. Environmental Protection Agency’s regulation to reduce carbon emissions from the nation’s power plants by 32 percent by 2030, should have been an important win for Virginia’s consumers. So far, it’s not.
Twenty-seven states sued the EPA over the Clean Power Plan. Virginia, unfortunately, was not one of them. These states, as well as energy and legal experts, argued that the plan overstates the EPA’s regulatory authority under the Clean Air Act and its legality must be settled in federal court before states and utilities are forced to implement it. The Supreme Court agreed.
Virginia should hit pause on its own preparations for the Clean Power Plan and see what the courts decide. While Gov. Terry McAuliffe’s support of the plan is no surprise, Virginia lawmakers should not quietly follow suit.
The plan, if implemented, could send electricity prices soaring. National Economic Research Associates, a leading economic consulting firm, calculated that the plan would drive up electricity prices for Virginia consumers by 13 percent, on average, each year between 2022 and 2033. The peak-year Virginia electricity price increase could be as much as 18 percent. Virginia would join 40 other states in seeing double-digit electricity price increases. The total costs nationally to consumers to comply with the plan could total nearly $300 billion from 2022 to 2033.
Why the jump in electricity prices and the huge cost to consumers? The simple answer is that the Clean Power Plan forces states and utilities to abandon their most affordable source of electricity—coal-generated power—in favor of more expensive alternatives, many of which simply can’t compete in the marketplace without generous taxpayer subsidies.
Proponents of the plan have pointed to tepid utility support as evidence that it both can and should be implemented. But utilities aren’t going to be the ones paying for a radical overhaul of the nation’s electricity sector. That cost is going to be passed on to electricity consumers.
In fact, some utilities see the plan as a means to monetize huge investments in new energy infrastructure and to simply blame the cost increases on the EPA. Virginia consumers are going to get the short end of the stick. Early power plant retirements and then the needed construction of new power plants, pipelines and transmissions lines will cost a fortune.
The poor and those on fixed incomes, often our seniors, will bear a disproportionate burden of these rising electricity costs. Studies have shown that carbon taxes—and that’s exactly what the EPA’s plan is—are regressive. They impose a higher burden, relative to income, on lower-income households. With so many Virginians barely getting by as it is, why would we choose to impose higher costs on a necessity like electricity?
Virginia, and the nation, would be far better served by focusing on energy innovation to reduce emissions than on regulatory fiat. Heavy-handed government action to replace affordable sources of energy with those that are more expensive, and then pass the cost off to consumers, is unforgivable.
The Supreme Court’s stay of the Clean Power Plan provides Virginia a golden opportunity to put politics aside and re-evaluate whether the EPA’s regulatory mandate is in the best interest of its citizens. State lawmakers would be wise in joining the majority of states and firmly saying no.
See the article here.
- On March 29, 2016