EPA coal regs will raise electric rates

Winningreen Issue Alert       A061611

EPA’s proposed regulations for coal plants will cause electric rates to skyrocket

By Gretchen Randall

Date:  June 16, 2011

Issue:
A recent Chicago Tribune article claims that new regulations proposed by the U.S. Environmental Protection Agency (EPA) to remove 91% of mercury emissions from coal-fired power plants would make it uneconomical to retrofit many older facilities forcing many owners to opt to shut them down. Since coal-fired power plants supply about half of all electricity generated in the country, such a loss of production would cause electric rates to rise 40-60% according to the Tribune article.

While some utilities like Exelon would not be affected since most of its electricity is produced by nuclear power, American Electric Power (AEP) plans to close one-fourth of its coal-fired plants and still spend $8 billion to retrofit the remaining plants to meet EPA regulations.  AEP estimates nearly 600 power plant workers will lose their jobs in rural areas of Virginia, West Virginia, Kentucky, Ohio, Indiana and Texas.   

Even the International Brotherhood of Electrical Workers is backing coal-fired utilities saying the shutdown of older plants would cause 50,000 workers in the utility, mining and railroad industries to lose their jobs. (NY Times) IBEW was a strong supporter of Democrats and Obama both in 2008 and 2010.

Others like Mary Gade, former Region 5 administrator of EPA and now president of Gade Environmental Group, believe the news rules could prevent1200 pollution-related deaths each year in Illinois.

Comment: Many say this is the most expensive government regulation in history.  The Wall St. Journal says the EPA itself estimates the new rule will cost $10.9 billion a year and is the administration plan to sidestep Congress’ decision to defeat a cap-and-trade bill. http://online.wsj.com/article/SB10001424052748703818204576206662079202844.html?KEYWORDS=coal+is+from+earth

Comment: Arbitrary, costly and job destroying rule-making by the EPA and other agencies has been a hallmark of this administration.  Such capriciousness could be ended once-and-for-all by passage of the American Energy Act of 2011 developed by the Institute for Energy Research.  We urge everyone to read this bill at: http://www.instituteforenergyresearch.org/2011/04/19/ier-presents-the-american-energy-act/

Background and links: The changes go into effect in 2014 when the change would add $2.7 million to the electric bill for the Chicago Public Schools, $3.3 million extra for the Metropolitan Water Reclamation District and $5.4 million extra for the city of Chicago.  Read the article at:   http://www.chicagotribune.com/business/ct-biz-0612-rates-20110611,0,2195993,full.story    Also “Power Plant Union asks Congress to delay EPA’s Air Pollution Rules” at: http://www.nytimes.com/gwire/2011/05/16/16greenwire-power-plant-union-asks-congress-to-delay-epas-87699.html

Contact: Gretchen Randall
Winningreen LLC
Chicago, IL
Phone: 773-857-5086
e-mail: grandall@winningreen.com