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EPA Rule May Threaten Jobs, Economy

An EPA administrator will sign the rule later today.

Today, the EPA is expected to finalize its regulation of carbon emissions from coal-fired power plants. An EPA administrator will sign the rule later today.

In light of this change, the Electric Reliability Coordinating Council (ERCC), a group of energy companies working on common sense energy and environmental policy, has prepared a document answering ten questions about the final EPA carbon rule.

The report, published July 31, follows the council’s previous report: The EPA’s Clean Power Plan: A Clear Threat to Electric Reliability, which cites the North American Electric Reliability Corporation’s (NERC) findings that the rule would add “strains” to “essential reality services.”

This concern is one of many that have been expressed by the rule’s critics. In response to this criticism, EPA has made several changes to the rule, most notably, allowing more time for states to file their implementation plans. However, ERCC explains that the deadlines are still unrealistic, citing similar state plans that needed several years to solidify.

Adding to the concern is the amount the rule relies on renewable energy, which (although greatly improved) still poses issues of its own. ERCC adds, “There is still significant problems associated with using ever higher renewable rates for base load power production.”

To address these concerns, States must consider reliability in their plan development. The solution, a safety valve, would allow a state to ask the EPA for a temporary waiver to its compliance plan in order to protect the electric grid. The safety valve would allow a unit to operate for up to 90 days outside of the plan, two times during the unit’s lifetime (i.e. those days wouldn’t count towards documented emissions). The group that would permit this has yet to be determined, but EPA is coordinating with Regional Transmission Organizations.

Perhaps of most concern, however, is the rule’s impact on electricity prices – an effect EPA and other environmental groups do not deny.

In addition to larger energy bills, many worry that the rule will actually reduce the amount of jobs.

ERCC looks to the past decade to support this claim, saying “environmental standards or clean energy mandates will not create industries in the United States that will export clean technology to the rest of the world. To the contrary, the cost of such mandates is borne where they are imposed, but the equipment may well be produced by workers in other countries."

Expanding on this issue, the National Black Chamber of Commerce (NBCC) released a report detailing the potential impact of the regulation on low income groups and minorities.

According to the report, the proposed regulations would have “serious economic, employment, and energy impacts at the national level and for all states, and the impacts on low-income groups, Blacks, and Hispanics would be especially severe.”

Specifically, the NBCC explains that the rules would significantly reduce U.S. GDP each year over the next two decades (more than $2.3 trillion); destroy millions of jobs; and more than double the cost of power and natural gas.

The report cites FreedomWorks’ Deneen Borelli, who goes as far as to say that the regulations are “The green movement’s new Jim Crow law.”

In a statement to the Committee on Energy & Commerce, Subcommittee on Energy and Power, Eugene M. Trisko, an energy economist and attorney, explained, “The National Economic Research Associates (NERA) estimates that the carbon rule will increase delivered electricity prices in the 31 states by 15%, on average, during the period 2017 to 2031.” This means that electricity for the consumer will be 15% higher (on average) each year under the Clean Power Plan (CPP) than it would be without the rule.

The ERCC adds that the estimates may be conservative, “because they do not take into account any additional natural gas infrastructure or electric transmission investments needed to comply with EPA regulations.”

While proponents of the rule say the rule with save money and create jobs, the ERCC maintains “you can’t regulate your way to prosperity.”

It is expected that several groups will likely sue EPA over the new rule, in addition to some states who may ask for the ruled to be stayed (put on hold). If such motions succeed, the rule will be delayed until its legality is determined.

The ERCC says that “a stay is a good idea,” as the final rule is “likely to fail on the merits and because it can in short order inflict significant harm on the states and the regulated community.”

In the event that a stay is not issued, the rule will proceed though implementation, although the ERCC believes there is little doubt that many states will challenge the rule “as soon as possible.”

The ERCC adds, “Aside from clear threats to reliability and the economy of the states, state leaders are also angry that EPA has finalized an unprecedented interference into state authority over energy regulation and markets, clearly inconsistent with statutory and Constitutional principles.”

According to Dr. Laurence Tribe, a Harvard professor who testified before congress, the rule constitutes “a total overhaul of each State’s way of life,” adding that it is an “an unconstitutional trifecta: usurping the prerogatives of the States, Congress and the Federal Courts – all at once.”

EPA expects draft implementations plans from States within the year, with a final plan in three, and compliance beginning in early 2022. EPA is also offering an early action credit for States that begin compliance before these dates.

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