Electricity Prices to Increase Under Clean Power Plan

A state-by-state analysis of the impact of the Environmental Protection Agency’s (EPA) proposed Clean Power Plan (CPP) indicates people across the country can expect higher electricity bills if it is adopted.

            The CPP, which aims to limit carbon dioxide emissions from power plants, is expected to be finalized in August.

            Attorney Eugene Trisko’s state-by-state analysis of CPP regulations, conducted for the American Coalition for Clean Coal Electricity (ACCCE), found Americans will likely see higher energy rates when the new mandates go into effect. Georgia residents, for example, can expect their electricity prices to rise 12 percent due to the proposed carbon dioxide regulations. Floridians should expect 13 percent higher electricity costs; electricity prices for ­­­­­­Oklahoma residents could rise 15 percent; and Utahans can expect price increases of 20 percent.

            An October 2014 study by NERA Economic Consulting puts CPP’s overall price tag between $41 billion and $73 billion per year in higher electricity prices, with ratepayers in 43 states facing double-digit electricity rate increases under the rule. 

Rough for the Poor

Impoverished Americans spend a higher percentage of their incomes on energy than the relatively wealthy, so CPP is expected to hit them the hardest.

            In Mississippi, where electricity prices are projected to rise by an average of 11 percent under CPP, more than 60 percent of households take home less than $50,000 annually before taxes. Those households currently spend 19 percent of their after-tax incomes on energy, and Mississippi households with annual incomes less than $30,000 spend one-quarter of their incomes on energy.

            Mississippi’s situation is by no means unique. In Pennsylvania, electricity prices will rise by a minimum of 14 percent under EPA’s new regulations, the ACCCE report notes. Among Pennsylvania households receiving less than $50,000 per year, 17 percent of the family budget is already dedicated to energy. In Kansas, residents with incomes of less than $30,000 spend 22 percent of their incomes on electricity.

            All consumers can expect higher electricity bills, says Trisko, “including senior citizens on fixed incomes and low-income families that can barely make ends meet today.”

Unrealistic EPA Projections

EPA estimates its regulations will cut electricity bills by 8 percent in the year 2030, but Trisko says those estimates are unfounded.

            “EPA relies on very aggressive assumptions about the deployment of energy efficiency that are simply unrealistic,” Trisko said.

            Noting NERA estimated Americans would have to spend $500 billion on energy efficiency improvements in order to meet EPA targets, Trisko argues such an expectation is impractical.

            “Roughly one-half of American households have gross annual incomes of less than $50,000, with an average take-home income of less than $2,000 per month,” Trisko said. “These families live paycheck-to-paycheck and do not have the savings to support such major investments [in increased energy costs].”

            Matthew Kandrach, vice president of the 60 Plus Association, an advocacy organization for seniors, is concerned about CPP’s impact on the elderly and those with fixed incomes.

“CPP puts seniors squarely in the crosshairs of Obama’s far-left environmental agenda,” said Kandrach. “Millions of older Americans living on fixed and diminishing incomes will see their electric bills skyrocket 20–30 percent with EPA’s attack on affordable energy. This is a prescription for hardship for many seniors, forcing them to  skip meals, doctor appointments, or medicine just to keep their lights on. Why must our most vulnerable citizens suffer just to support President Obama’s misguided political agenda?”

            Trisko says the consequences of CPP will go well beyond higher electricity bills.

            “We will lose hundreds of thousands of jobs in coal mining, manufacturing, and energy-intensive industries, as companies offshore their plants to lower-energy-cost developing nations with weak environmental standards,” Trisko said. “American consumers need to be informed about the true costs of unilateral actions to reduce carbon emissions, because they will pay the bills. EPA’s climate agenda should become a focus issue for voters in the next election.” 

 Ann N. Purvis (ann.n.purvis@gmail.com) is an attorney in Dallas, Texas.

Internet Info

Eugene Trisko, “State Energy Costs for Families,” American Coalition for Clean Coal Electricity, April 2015: http://www.americaspower.org/federal-issues/state-energy-cost-for-families 

NERA Economic Consulting, “Assessing Economic Impacts of a Stricter National Ambient Air Quality Standard for Ozone,” July 2014: http://heartland.org/policy-documents/assessing-economic-impacts-stricter-national-ambient-air-quality-standard-ozone



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