The U.S. Environmental Protection Agency is coming to Denver this week to drum up state support for a federal effort to implement the Obama Administration's Clean Power Plan. Announced by the White House with great fanfare this past summer, it is the president's response to climate change. For Colorado, it will be a costly response.
In seeking to reduce carbon emissions from power plants, the plan defies both Congress and public opinion. Congress has repeatedly rejected caps on carbon dioxide emissions, and opinion polls consistently show voters won't pay for them.
The plan also defies common sense. Logic doesn't support claims by the EPA that replacing affordable sources of electricity like coal with far costlier sources will somehow lower electricity costs. On the contrary, EPA's climate change regulation amounts to an energy tax.
A new analysis of the Clean Power Plan by Energy Ventures Analysis, an independent economic consultancy, shows the irreparable harm this rule inflicts on the country, especially on states like Colorado. In just eight years, from 2022 to 2030, consumers here will have paid $2.7 billion more for wholesale electricity compared to the cost without the rule. So instead of lower energy costs, as EPA promises, Colorado will be stuck with a 19 percent spike in costs, plus a $3.3 billion tab for new energy infrastructure to replace existing power plants retired by the rule.
EVA shows that what is bad for Colorado is also bad for the country. By 2030, EVA projects Americans will have paid $214 billion more for wholesale electricity than they would pay without this regulation. The bills start to come due in 2022, when consumers will shell out an additional $15 billion a year. By 2030, they'll pay $31 billion a year more, a 21 percent cost increase overall. Add the costs of lost manufacturing jobs, less affordable energy sources, and the estimated $64 billion tab for replacing lost power plant capacity, and you begin to understand why the Clean Power Plan is a tax on energy.
EPA doesn't call this a tax on electricity. But with less money in the family budget for groceries, for the occasional evening out, for paying monthly bills, that's what consumers might call it. Driving these costs is the Obama administration's determination to eliminate coal from the mix of fuels that generate electricity - regardless of the burden on households and businesses. Coal generates 39 percent of the nation's electricity. So removing it from the fuel mix, especially in coal states, will raise demand and prices for alternative fuels to fill the gap.
EPA dismisses the pain to consumers. But most American families expect, and many low-income families rely on affordable electricity to balance the budget. And it's affordable, coal-generated electricity that the administration now wants to drive out of the American energy mix.
As a result, the Clean Power Plan falls hardest on low-income families. Today about half of American households pay close to 20 percent of their disposable income on energy-related expenses. EPA will force them to pay more. The same federal agency that claims global warming hurts the world's poor is now hurting America's poor through regulations that won't put a dent in any global warming, even assuming the agency's models are correct.
EPA touts the rule as vital to halt the rise in global temperatures when the agency's data show the Clean Power Plan will have virtually no measurable impact on global temperatures or greenhouse gas concentrations.
The Clean Power Plan is an energy tax. And Colorado should not have to pay for it.
Stuart A. Sanderson is President of the Colorado Mining Association.