More on the impact of EPA regulations

We’re being inundated now with reports of “necessarily skyrocketing” electricity prices as utilities around the country struggle to find a way to meet the increasingly unrealistic and overzealous mandates of the EPA. As Louisville residents are facing rate hikes of almost 20% by 2016, LG&E representative Chip Keeling notes that,

The EPA is forcing utilities to do this. We don’t have a choice. It’s not a question of are we going to meet them. The question is when and how and how much money. We have to meet these regulations because the EPA is mandating it for us to do it. They’re forcing us to do it.

As I discussed in my latest column in Issue 1, 2011 of American Coal magazine (also online at www.americancoalonline.com), these rate increases shouldn’t be a surprise.

Arguing that the imposition of strict and expensive regulation helps keep electricity prices low and create new jobs, however, is nonsensical. That argument ignores the basic fact that utilities are producing goods and services and that by making the production of those goods and services more difficult and costly, the EPA is, by definition, making the output more expensive and less efficient. One cannot reasonably claim that a more expensive, less efficient operation can produce more jobs, at the same prices, as an efficient, low-cost operation.

The evidence simply cannot be ignored any longer. The imposition of these new EPA regulations will have enormous negative economic impacts on industry, jobs, and rate payers. The fact that they are being forced into place, despite the fact that they will have little to no discernible environmental benefit, at these unprecedented rates, and well ahead of technological development schedules, will only serve to make their impacts more pronounced.

09. June 2011 by Jason Hayes
Categories: Environment, EPA, Marketplace Information, Policy, Power Generation, Utilities | Tags: , | Comments Off on More on the impact of EPA regulations