Wednesday, January 15, 2014

Anti-Environmental Electric Coops

Today, I received a postcard from my electric coop, South Central Indiana REMC, urging me to go to this website in order to send EPA a message in opposition to its proposed greenhouse gas regulations, which the postcard and website both misleadingly aver could "significantly raise" my monthly electric bill.

I went to the website to check it out. It's run by a national association of electric coops all of which are part of an effort to undermine EPA's new, and needed, greenhouse gas regulations. The warning they sound is hollow. EPA's current spate of regulations would not significantly increase electric bills. In the first place, the only current regulatory proposal on power plants would regulate emissions only from new power plants; it has no effect at all on emissions from existing power plants. So, the cost of electricity will only go up if your utility intends to build a new power plant.

Moreover, the regs would only apply to new power plants that would burn coal, instead of natural gas. But no utility has been building coal-fired plants in recent years because coal is more expensive than natural gas. And natural gas plants would meet the proposed regulations without doing anything to curtail emissions.

Only if the price of natural gas goes up, compared to coal, will utilities start building new coal-fired plants again; and if that happens, then the regulations will have some bite, forcing power plants to design in carbon capture and sequestration technology, which could well be expensive and add to consumers' utility bills. From a basic economic point of view, consumers should pay more for the coal-based electricity they consume because of its higher social cost. The notion that consumers should not have to bear any of the costs of the carbon their demand produces is economic nonsense.

My recommendation for anyone who receives a postcard like the one I received from my electric coop is not to ignore it but to go to the website (action.coop) as they recommend, but replace the default language calling on EPA to reconsider its regulatory proposal with a message of strong support for EPA's initial, very modest, efforts to start regulating carbon emissions to mitigate climate change.

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