Economic PolicyEnergy Policy

Why Does the EPA Want to Increase Your Utility Bills?

Another idea for reducing carbon emissions.

The Environmental Protection Agency (EPA) announced new regulations yesterday that will likely lead to Arkansans paying higher utility bills and add steep compliance costs to electricity providers.
The new EPA proposal rule mandates a 30 percent reduction in carbon dioxide emissions from electric generating plants by 2030.
The EPA claims the plan will “shrink electricity bills roughly 8 percent by increasing energy efficiency and reducing demand in the electricity system.”
“By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids,” according to EPA administrator Gina McCarthy.
However, many aren’t sold on the supposed benefits of the new regulations.
Duane Highley, President and CEO of the Arkansas Electronic Cooperative Corporation, said:

We are disappointed that this EPA rule will reduce our use of coal, which is our most economical and reliable fuel to generate electricity. Although the proposed rule leaves the precise implementation details to the states to develop, the inevitable result will be the use of more expensive fuels, such as natural gas.

According to Highley, the reduction in the use of coal to generate electricity could also reduce the reliability of electric service:

Our nation needs and deserves a diverse energy supply portfolio to keep the lights on. By reducing the amount of coal in our generation mix, prices will go up and reliability could go down.

The plan could lead to approximately 36,000 jobs lost annually between 2014 and 2030 in  the West South Central region (Arkansas, Oklahoma, Texas and Louisiana), according to the U.S. Chamber of Commerce.
A typical U.S. household would also lose $3,400 in disposable income, according to the Chamber.
“Our analysis shows that Americans will pay significantly more for electricity, see slower economic growth and fewer jobs, and have less disposable income, while a slight reduction in carbon emissions will be overwhelmed by global increases,” Karen Harbert, president and CEO of the U.S. Chamber of Commerce’s Energy Institute, said.
U.S. Rep. Tom Cotton said Monday he planned to co-sponsor legislation that would block the EPA’s proposal.
U.S. Sen. Mark Pryor said Monday he has “serious concerns” about the EPA’s proposal but didn’t specifically say whether he opposed the new regulations.
U.S. Sen. John Boozman said Monday that “Congress rejected the President’s cap-and-trade policy, so now he is bypassing the will of the legislative branch and imposing a similar plan bit by bit.”
Boozman added:

This is another example of bureaucrats trying to control climate from their desks in Washington, with no concern for the pain it will cause. Unfortunately, that pain falls hardest on low-income families who will be forced to pay more for electricity and many other essential needs. As usual EPA is sending out misleading information that exaggerates the benefits and minimizes the costs.

Under the proposal, state officials will have two years from now to submit a plan to the EPA complying with their new carbon mandates.

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