There’s no such thing as a free lunch. Someone always has to pay. That’s certainly the case with the Environmental Protection Agency’s Clean Power Plan.
While the plan apparently has support in some circles, the truth is that implementing it won’t be cheap. In fact, according to a Heritage Foundation analysis of Energy Information Agency (EIA) data, implementation will cost the U.S. economy about $150 billion a year. That works out to $1,700 a year for a family of four.
Put simply, the rule amounts to a massive tax on the price of electricity, one we simply can’t afford to pay.
Of course, it isn’t just families that would feel the pinch. Small business, the engine that drives our economy, would have to spend more on energy, and that, in turn, would push up prices on everything.
EIA data suggest the financial pressure on businesses would be so great, many would have to eliminate jobs so they could afford to keep the doors open. Based on the agency’s data, it’s estimated job losses could amount to nearly half a million a year by the late 2020s.
It’s unknown how many of these job losses could come from small businesses, because the EPA didn’t consider how the rules would affect small employers. Instead, the agency considered the direct effects on small power generation facilities. My association, the National Federation of Independent Business, filed comments with the EPA pointing out this oversight. Our comments were ignored.
Coal-fired power plants generate only about one-third of Georgia’s electricity. Natural gas, another fossil fuel, generates another 34 percent, but historically it has been subject to big fluctuations in price because of disruptions in the supply chain due to natural disasters. Wind, solar and other renewable sources of energy aren’t readily available, accounting for barely 3 percent of the state’s electricity — nowhere near enough to make up the difference.
That means the cost of energy is almost certain to increase as power companies shift the cost of compliance to their customers. Plus, the final regulation is almost 1,600 pages, and industry officials and state regulators are still digesting it. Much like the Affordable Care Act, there may be details buried deep in the regulations that could make things even worse for Georgians.
State governments are being driven by the Obama Administration to cooperate by creating plans that meet the federal government’s harsh standards. It’s an almost impossible choice they face: Go along, or leave the tough decisions to Washington regulators.
Last month, 15 states asked the EPA to put its Power Plant Rule on hold pending an expected legal challenge. They are Alabama, Arizona, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Utah, Wisconsin and Wyoming.
Congress shouldn’t take this lying down. Already, the House has passed legislation that would let states opt out of the rule if they find electric rates will rise sharply. There is companion legislation introduced in the Senate, but it hasn’t gotten a vote yet.
If this rule goes into effect, it will be painful for small businesses and family budgets. At a time the nation is struggling to come out of recession, the EPA’s actions threaten to create another economic crisis.
Kyle Jackson is state director of the National Federation of Independent Business.
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