EPA Regs Will Drive Up Prices and Cost Jobs

By May 2, 2012Energy

The Energy Information Agency (EIA) noted on its daily “Today In Energy” that wholesale electricity prices in Texas spiked on April 26th due to warmer weather. I wonder if the Environmental Protection Agency (EPA) knows about this and is wondering what its efforts to close down coal powered utility generators will do to both supply and prices in states like Texas, Missouri, Ohio, Michigan as temperature climb during the summer months?

The EIA announcement states:  

“Warmer-than-normal temperatures across Texas drove the hourly, day-ahead wholesale electricity prices between 5:00 p.m. and 6:00 p.m. on April 26 and 27 above $500 per megawatt hour (MWh) in ERCOT, the electric system operator for most of Texas. Very high prices for just part of an upcoming day, especially during “super peaks”, can yield high average prices for the entire on-peak period. Prices for on-peak power in ERCOT were about four times higher than most other major power markets during that week.”

As the EPA promulgates the Utility MACT regulation, the Cross-State Air Pollution Rule (CSAPR), and the New Source Performance Standards for coal-fueled utilities, it does it the name of the environmental benefits. The fact is, however, that the incremental benefits compared to high costs placed on utilities will do far more harm than good. There will be substantial job losses in the utility and coals sectors. There will be a significant ripple effect as communities lose jobs and as electricity prices increase by double digits.

Manufactures will not be able to compete in the global economy because of high energy prices. Currently it costs U.S. manufacturers 20 percent more than our foreign competitors to manufacture goods in this country. As these new regulations are implemented, those costs will go up significantly.

The Administration’s opposition to coal will have a harmful impact on manufacturing in the U.S. Anywhere from 30 to 50 power plants will close over the next several years. Union and non-union workers alike will find themselves out of good paying jobs and will have to find work in other industries. Communities will be devastated and families will feel the financial impact for years to come. Perhaps our government should adhere to the Latin phrase- “Primum non nocere” which when translated means, “First, do no harm.”

Chip Yost is vice president of energy and resources policy, National Association of Manufacturers.

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