Congressman Slams EPA For Claiming Global Warming Rules Will Reduce Energy Prices

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Michael Bastasch DCNF Managing Editor
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Rep. David McKinley was astounded to hear a top Environmental Protection Agency official say regulations to cut carbon dioxide emissions from power plants would reduce consumer energy bills after 2030.

“Are you serious?” McKinley, a West Virginia Republican, asked EPA acting administrator for clean air Janet McCabe in a hearing Wednesday. McCabe had just said Americans’ energy bills would go down after 2030 as a result of energy efficiency mandates.

“That is what our analysis shows across the country,” McCabe said, talking about the agency’s regulations forcing states to reduce power plant emissions 30 percent below 2005 levels by 2030. EPA claims that despite huge amounts of coal-fired power plants closures, these regulations would reduce energy bills 8 percent after 2030.

“Unbelieveable,” McKinley said. “Just seems delusional.”

While energy bills may go down 8 percent after 2030 because of energy efficiency measures like EPA predicts, that’s only after a “4 to 7 percent increase in retail electricity prices, on average, across the contiguous U.S. in 2020,” according to the agency’s own proposal.

The EPA also says its rule would cause “a 16 to 22 percent reduction in coal-fired electricity generation” and cause “electric power sector delivered natural gas prices will increase by about 8 to 12 percent in 2020.” The agency adds that electric bills would fall 8 percent after 2030 because energy efficiency measures would reduce overall demand for power, meaning people would be using less energy.

But Republicans were skeptical of the EPA’s claim that electricity bills will fall after 2030, pointing to the fact that government data shows electricity rates going up through 2014 and 2015. Government data also projects annual electricity rates in 2016 to be the highest levels ever — in terms of nominal pricing.

Lawmakers also pressed McCabe on whether or not the EPA’s CO2 plan would allow states to adjust emissions reductions if electricity rates rise too high. States won’t be able to do that, which Republicans criticized the agency for.

Despite criticisms, McCabe said the CO2 regulations would “give states flexibility” to “protect lower income ratepayers” from increases in electricity prices in the coming years. Overall, the EPA estimates the rule would cost between $5.5 billion and $7.5 billion in 2020 and $7.3 billion and $8.8 billion in 2030.

But utilities say the EPA is underestimating the costs of reducing carbon dioxide emissions. PJM Interconnection, the country’s largest power grid operator, reported EPA’s regulations would retire 49 gigawatts of power in the worst-case scenario — enough to power 50 million homes.

Another analysis by the National Economic Research Associates, done on behalf of the coal industry, found that EPA’s CO2 regulation would raise electricity prices in the 31 states by 12 percent from 2017 to 2031.

NERA’s report also estimated that coal-fired “unit retirements would increase by about 45 gigawatts… Coal-fired generation would decline by about 29% on average” from 2017 to 2031.

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