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Energy Deception


The Environmental Protection Agency (EPA) rolled out its Clean Power Plan (CPP) during August. The details of and the opposition to the plan are covered in several articles in this edition, including the first two stories in the News section, the Dateline Washington column and the Marketwatch column. SNL Energy quickly compiled a report that accurately determined which states would win and lose under the plan. Spoiler alert: There are many more losers than winners.

The Energy Information Administration (EIA) said coal-fired power plant closures could reach 90 gigawatts by 2020 under the CPP. In very plain English at the beginning the plan, the EPA suggests that states should switch to low-emitting natural gas or zero-emitting renewables to comply. Similar to the Affordable Care Act, the Obama Administration has grossly underestimated the cost of compliance and they are loaded into the back end of these regulations, meaning they will hit ratepayers hardest after President Obama leaves office.

EPA Administrator Gina McCarthy has misled Americans into believing the CPP would be a painless process that would protect public health and reduce energy costs. A study conducted by the Institute for Energy Research (IER) found that scrapping the existing coal fleet would be expensive, unnecessary and the public would pay the price. Cross-referencing data from the EIA and the Federal Energy Regulatory Commission (FERC), the IER found that nuclear power costs averaged $29.60 per megawatt-hour (MW-hr), and that coal and natural gas were $38.40/MW-hr and $48.90/MW-hr, respectively, from existing plants. The costs for new gas plants averaged $73.40/MW-hr due to upfront capital costs, and they determined that wind facilities would cost $106.80/MW-hr. The IER study is one of the first to compare new sources with existing sources.

The top priority for any sound energy policy program should be affordability. After years of propping up renewable energy programs with subsidies, wind and solar only provide about 5% of U.S. electricity today. That’s a very thin and expensive slice of the energy pie. In a few short years, America’s middle and lower income families will have to choose between electricity, health care or food — that’s a tragic legacy. What’s worse, America’s remaining manufacturers, the companies that provide large numbers of well-paying jobs, will move production offshore where power is more affordable.

What the EPA has done here is likely illegal. Two months ago, the Supreme Court struck down a similar proposed rule, saying the agency failed to consider costs. It took two years for that case to reach the Supreme Court and the country can ill afford another two years. Hopefully, the ruling was enough to inspire governors and others to say, “No, enough is enough,” to a reckless EPA and an administration that has lost touch with reality.

P.S. Last month, I wrongly stated that each Norwegian was worth $175 million. As many readers pointed out, the figure should have been $175,000. My point, however, that environmental activists were coercing a sovereign wealth fund, which was founded by petroleum exports, to disinvest from coal, still stands.

Steve Fiscor


Steve Fiscor, Coal Age Editor-in-Chief
[email protected]