Are Your Electric Rates Going Up Soon?

The New Year is here, and with are over 40,000 new laws nationwide, tens of thousands new regulations, and let’s not forget the tax increases. Well we did get that big withholding tax break for two months.

One of the things Obama made clear after taking office he was against coal. Numerous times over the last three years he made statements against the coal industry while pushing his green energy agenda. So the EPA has put new sweeping regulations on coal fire plants, mainly addressing the plants that generate electric.

The U.S. Environmental Protection Agency (EPA) has issued the Mercury and Air Toxics Standards that went into effect January 1, 2012. The Mercury and Air Toxics Standards are in keeping with President Obama’s Executive. It is the EPAs contention the law was passed to limit power plant emissions of mercury and toxic air pollution like arsenic, acid gas, nickel, selenium, and cyanide. After the release of the new regulations, the EPA put out the following statement:

“By cutting emissions that are linked to developmental disorders and respiratory illnesses like asthma, these standards represent a major victory for clean air and public health– and especially for the health of our children”.

After the EPA announcement President Obama made a statement:

“Today's issuance, by the Environmental Protection Agency (EPA), of the final Mercury and Air Toxics Standards rule for power plants (the "MATS Rule") represents a major step forward in my Administration's efforts to protect public health and the environment.”

The Electric Reliability Coordinating Council released this statement:

““The bottom line: This rule is the most expensive air rule that EPA has ever proposed in terms of direct costs,” said Scott Segal, director of the Electric Reliability Coordinating Council. “It is certainly the most extensive intervention into the power market and job market that EPA has ever attempted to implement.”

The Associated Press surveyed utilities across the nation and estimated that 32 power plants will be shut down.

Of course the media did not mention this much because it was announced on December 23, 2011. If you're a savvy political appointee, like say Lisa Jackson the Environmental Protection Agency Administrator, and you're bringing out the Mercury and Air Toxic Standards for Power Plants rule that will raise electricity rates all over the country, particularly in battleground states of Illinois, Ohio, Indiana, Florida, and Michigan. What can you do to get the public to swallow the costs? Timing is everything, and you choose the Wednesday before Christmas, when most people aren't paying attention.

It's a shame the Regulatory Accountability Act of 2011, the bill Ohio Republican Senator Rob Portman proposed, has not been made law. His bill would require a detailed analysis of the costs and the benefits of such regulations and Executive orders. Since the Democrats did not allow it to become law, it will be to late before Americans find out the cost. The cost of compliance of this is staggering and this will raise energy prices considerably. The industry experts say many will make the plants compliant. There are many that it are not cost effective to update so they will be converted from coal to natural gas fired plants. But there are those that are not matter which conversion chosen, it is not cost effective to comply with the new regulations and those plants will be closed. Depending on whose report one can believe, estimates range between 18% and 35% of plants are going to be shut down.

Aside from the obvious costs due to lost jobs and the conversion costs being passed on to the consumer, there is another potential downfall. Our nation’s electrical energy is already stretched to the max on an aging grid system. Obama had campaigned in 2008 to ensure repairing this problem and providing a stronger grid system. Obama never addressed that issue but now with this Executive Order he will be straining the already fragile system. We can expect more brownouts and rolling outages as the demand get worse.

Estimates are that the closing will cost about 1.7 million jobs due to the closings. This is far from the right time to put an extra strain on the cost of energy for the middleclass to bear. Perhaps a wiser way to approach the issue was to start with the older plants that will now have to shut down and build replacements prior to shutting down and putting an unsesassary strain on the grid. The last things we need are more electricity disruptions not to mention higher electrical rates. That is my American view, tell me yours.

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