Seems these days, there are a zillion Big Business leaders, their puppets in Congress and legions of corporate cheerleaders crying wolf over the regulations that keep you, me and our fellow countrymen safe from unchecked corporate greed. The latest example of this is a study by the Edison Electric Institute (EEI), the largest trade association representing the electric utility industry, which concluded that the looming Environmental Protection Agency rules for power plants will create an economic “train wreck.”
Not surprisingly, this prophecy of doom and gloom has been found to be completely overblown, according to a new report by the Congressional Research Service (CRS).
CRS analyzed EEI’s study and found it was severely flawed and lacked credibility. The discredited EEI study is just another example of the disconnect between the alarmist rhetoric coming from special interests and reality.
Here are the main points of the CRS report:
1. “The primary impacts of many of the rules will largely be on coal-fired plants more than 40 years old that have not, until now, installed state-of-the-art pollution controls…Many of these plants are inefficient and are being replaced by more efficient combined cycle natural gas plants, a development likely to be encouraged if the price of competing fuel—natural gas—continues to be low, almost regardless of EPA rules.”
2. The EEI study was done before most of the EPA rules were even proposed, and it assumed that the rules would be more stringent, with shorter compliance deadlines, than the ones that EPA has actually proposed. Therefore, the EEI study great exaggerates the impact of the EPA rules.
3. The EEI study completely ignores the benefits of the EPA rules. According to the CRS report, “The costs of the rules may be large, but, in most cases, the benefits are larger, especially estimated public health benefits.”
The full report can be found here.
Recently, American Electric Power’s chairman admitted to shareholders that he was not worried about the new EPA rules. His public statements have been dramatically different, stoking fears about the disastrous impact the EPA rules will have on the economy:
“Because of the unrealistic compliance timelines in the EPA proposals, we will have to prematurely shut down nearly 25 percent of our current coal-fueled generating capacity, cut hundreds of good power-plant jobs, and invest billions of dollars in capital to retire, retrofit, and replace coal-fueled power plants,” AEP Chairman and CEO Mike Morris said in a statement last week. “The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling.”
A week earlier, Morris had sought to allay investors’ concerns about the plant closures and their effect on AEP’s bottom line at a June 1 investor’s conference.
“On balance, we think that is the appropriate way to go,” Morris said of the closures. “Not only to treat our customers, but also to treat our shareholders, near and long term, with that small amount of the fleet going off-line.”
Finally, Public Citizen released a report showing that the dominant force lobbying in support of the REINS Act, which is the signature anti-regulatory legislative proposal, is in fact the electric utility industry.