Dear Editor,

Earlier this year, the Supreme Court issued a stay on President Obama’s “Clean Power Plan” (CPP.) Essentially, the High Court determined that states shouldn’t be compelled to incur the hefty costs of closing down their coal-fired power plants before the case is fully litigated.

Federal number crunchers at the Energy Information Administration have now verified the hefty price tag of the CPP in a new analysis that says the plan will mean “significantly higher” prices for residential and commercial electricity. They attribute this to “higher transmission and distribution costs” coming at a time when electricity consumption will also grow slightly.

Interestingly, the EIA projects that these higher electricity prices will actually reduce demand 2 percent by 2030. Why? Because “compliance actions and higher prices” will force cash-strapped consumers to adopt their own austerity measures.

A key part of the CPP is the dismantling of coal-fired power in the U.S. As the EIA sees it, coal’s share of total electricity generation will fall to 18 percent by 2040. Coal power plants currently anchor America’s base-load electricity generation, so it’s understandable that their elimination would drive up prices. But is such a move justified?

The EIA projects that “renewable energy” (solar and wind) will play a “significant role in meeting electricity demand growth throughout most of the country.” It’s a bold gamble, since the EIA believes that renewables will account for 27 percent of total U.S. generation by 2040. But EIA data shows wind and solar power supplying only 5.6 percent of U.S. electricity generation in 2015. So, the jump to 27 percent will require major investments.

What’s instructive is EIA data on Germany, where residential retail electric prices have risen, and are expected to keep rising, due to higher taxes and fees for renewable power. Overall, Germany’s foray into green energy has driven the average residential electricity price to 35 cents/kWh, almost three times the U.S. average of 13 cents/kWh. Germany now has some of the highest residential electricity prices in Europe.

Under the Clean Power Plan, the EIA envisions the most significant changes in power generation occurring in regions where coal-fired power has played a key role, including the industrial Midwest. In the Northern Plains, coal power displaced by the CPP is expected to be replaced with increased renewables generation.

The net “benefit” of the CPP is that it will lower total power sector carbon dioxide emissions 20 percent by 2030. However, the EIA doesn’t mention the simultaneous increase in CO2 emissions from new coal plants in China, India, and other emerging Asian nations.

Overall, the CPP will impose massive expenses on businesses and consumers for CO2 reductions that will be instantly negated by far larger CO2 emissions growth overseas. Currently, the Supreme Court stay of the Clean Power Plan remains in effect, and governors have no legal obligation to comply. Thanks to the findings of the Energy Information Administration, they now have more reasons to challenge such a massive federal plan.

Terry Jarrett
Energy attorney and consultant, and a former commissioner on the Missouri Public Service Commission