The Environmental Protection Agency (EPA), seemingly undeterred by the slow economic recovery, is marching ahead with air pollution regulations that would increase electricity prices, raise costs for businesses and consumers, and risk power outages.
The EPA’s Cross-State Air Pollution Rule (CSAPR) and the Mercury and Air Toxics Standards (MATS) are scheduled to go into effect in January of 2012 and 2015, respectively. Other pending related regulations include the Boiler MACT and Utility MACT rules, coal ash regulations, and new standards for cooling water intake structures. All of these are expensive and put jobs at risk.
Earlier this summer, America’s largest utility explained that the EPA’s multipronged attack on traditional energy sources could cost Southern Co. up to $18 billion and increase electricity costs for Southern customers by an additional 10 percent to 20 percent during the next 10 years. Energy prices are expected to rise by several percentage points across the country. Higher electricity prices also mean higher prices for most goods and services.
Possible blackouts are another concern. Utilities announced that they would have to retire older coal plants in response to the regulations. But getting replacement electricity plants up and running can take several years and is subject to potential regulatory delays of many more years. In the meantime, an overloaded grid could be subject to blackouts.
A recent report by the U.S. Department of Energy fending off concerns that pending air pollution regulations pose risks to electricity reliability is far from settling the question of possible blackouts. Just a few days prior, the government-designated expert panel to ensure electricity reliability, the North American Electric Reliability Corporation (NERC), warned that the EPA’s proposed regulations pose one of the greatest risks to the electricity sector.
In addition to reliability issues from plant shutdowns, pending MATS create uncertainty. From The New York Times:
… about 600 large plants are likely to be shut for several months for the installation of pollution controls, executives said, and coordinating the shutdowns to avoid local electricity shortages will be a formidable task. Part of the uncertainty is that no one is sure how strictly the Environmental Protection Agency will enforce its rules or exactly what the rules will be. The agency is supposed to publish a new rule on mercury and air toxics on Dec. 16, for example.
These misguided regulations pose a further obstacle to the return of a strong and vibrant economy. Congress should roll back the EPA’s costly and risky attack on the American electricity sector.