October 28, 2015

Tricks and Treats from EPA Carbon Regulations

Heath Knakmuhs

In keeping with this season of ghosts and witchcraft, we are shedding some additional light on the menu of tricks and treats that are being handed out by the Environmental Protection Agency (EPA) through the carbon rules for existing electric power plants that the EPA finalized in August, and which just set off a firestorm of litigation this past Friday.  Unlike most households’ plans for the upcoming Halloween festivities, it appears as if the EPA is rather stingy with the provision of “treats” to the states that might come knocking at its door.  Instead, the EPA is much more likely to force states into higher electricity prices, diminished electric reliability, and reduced economic competitiveness. 

The haunting graphic above summarizes the chilling economic impact of the thousands of pages of regulatory text issued by the EPA to set forth and support its carbon regulations that seek to turn many of our nation’s electric power plants into industrial graveyards.   While we have asserted that the EPA’s recently finalized carbon rules will make affordable electricity prices an apparition of the past, our new graphic clearly illustrates the wrath that EPA’s tricks will have upon businesses and consumers.  Quite simply, the EPA’s mandates should instill significant fright in the regulators, legislators, businesses, and residents of the states that are positioned to be eternally haunted by the EPA’s carbon regulations. 

Putting EPA’s mysterious projections aside, we referenced the Agency’s own state-specific fact sheets accompanying its carbon regulations to shine a full moon’s worth of light upon which states get the equivalent of a full size candy bar, and which states get the lame candy nobody wants.  We did so by tracking the emissions rate reductions that would be necessary under the EPA’s plan in each state from 2020 through 2030.  Our analysis – without reliance upon any witchcraft or magic potions – found many more tricks than treats. 

Based on EPA’s own projections, the nine “treated” states are actually permitted to increase their emissions rates from 2020 to 2030 while still achieving compliance with the agency’s startling carbon mandate.  Meanwhile, the remainder of the states that are subjected to the EPA’s hair-raising carbon reduction plan will have to implement a dramatic reconfiguration of their electricity system at the frightful cost of increased electricity costs and diminished economic opportunity.  To place your eyeballs upon the details of the pumpkin carving behind our predictions, check here.  

Interestingly, the states lucky enough to receive a treat from the EPA’s carbon regulations have already been scaring consumers with some of the highest electricity prices in the country.  Unfortunately, the EPA’s new rule will impose dreadful electricity rate increases and cap-and-trade economies upon poor souls everywhere. 

This graphic provides a ghostly indication that EPA’s carbon regulations do not merely seek to reduce carbon dioxide emissions.  Instead, the EPA is dishing out tricks and treats by imposing a cap-and-trade regime that will drive up prices in low-cost electricity states and redistribute the revenues associated with those higher prices to select West Coast and Northeast states.  Whether merely an apparition or an intended enchantment of the EPA’s regulation, the disparities between the ‘tricked’ and ‘treated’ states shines a light on the inherent unfairness of the EPA’s scheme.