Justin Sykes

TSCA Modernization Act Would Benefit Consumers and the Economy

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Posted by Justin Sykes on Monday, June 1st, 2015, 2:19 PM PERMALINK

This week the House Energy and Commerce Committee will hold a full committee vote on H.R. 2576, the TSCA Modernization Act. This bipartisan Act, sponsored by Representative Shimkus (R-IL) and co-sponsored by Representatives Upton (R-MI), Pallone (D-NJ) and Tonko (D-NY), would offer much needed reforms to chemical regulation in the U.S. that would benefit consumers and the nation’s economy.

The Toxic Substances Control Act (TSCA) was passed in 1976 to regulate the production and use of chemicals in American commerce. However industry innovations in product development and chemical safety have far outpaced the Act’s provisions leaving it outdated and untouched by lawmakers for almost 40 years.

This has led to criticism of TSCA over the years from industry, environmental and consumer groups that all point to inefficiencies in the Act’s chemical evaluation process, as well as a patch work of state regulations that can stymie interstate commerce and increase compliance issues for businesses.

Both of these concerns have far reaching impacts on the economy and consumer confidence, further making the case for reforms. As such, the TSCA Modernization Act or H.R. 2576 would alleviate these longstanding issues surrounding TSCA by offering common sense reforms.

First, H.R. 2576 puts in place measures to improve the chemical review process in order to increase consumer protections. The Act establishes hard and fast deadlines for EPA decisions on risk evaluations and requires such decisions be based on health and environmental considerations as opposed to costs. It also requires full consideration of vulnerable subpopulations and ensures each review is based on the best available science.

Additionally, products that fall within TSCA’s purview often move in and out of interstate commerce, being used as part of manufactured goods or as intermediaries in industrial processes. Due to inefficiencies in TSCA on the federal level, this has led to a patchwork of state laws that has contributed to burdensome compliance issues and uncertainty for businesses.

H.R. 2576 would remedy such compliance issues by providing for a more cohesive national chemical regulatory program that gives businesses and states a new level of certainty with regards to interstate commerce. The Act would also provide for state interests by allowing states to act if the EPA does not.   

The time has come for lawmakers in Congress to act to update and improve the Toxic Substances Control Act. For too long TSCA provisions have gone wanting, however the TSCA Modernization Act (H.R. 2576) now offers a bipartisan solution to reforming this outdated legislation.      


Photo Credit: Arend

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Post Office Continues Long History of Hemorrhaging Money

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Posted by Justin Sykes on Friday, May 29th, 2015, 3:45 PM PERMALINK

“Neither snow nor rain nor heat nor gloom of night” can keep Postal Service bureaucrats from continuing to lose billions.  This month the United States Postal Service (USPS) posted it’s second quarter finances for 2015, suffering a net loss of $1.5 billion in just three months. Yet losses aside, what is most concerning is how a government-backed monopoly receiving $18 billion annually in taxpayer-backed subsidies continues to flounder financially and why it has been allowed to do so for so long.

Sadly the $1.5 billion lost from January to March is just the tip of the financial iceberg. During the same period last year net losses were actually higher at $1.9 billion. While this change could appear to some as an improvement, it is actually an incremental part of a much larger trend of financial despair that has plagued the Post Office for years.

The most recent second quarter losses mean the Post Office has now consecutively posted revenue losses 24 out of the last 26 quarters. Such an economically dismal start also puts the USPS on schedule to make 2015 the 9th consecutive year in which they have suffered multi-billion dollar losses.

In 2014 USPS found that “its total liabilities were $67.16 billion…compared with $23.16 billion in assets.” Thus it is no surprise analysts estimate the Post Office has seen over $47 billion in losses over the last decade. However, as outrageous as the losses themselves are, the USPS’s suggestions for reducing the revenue gap are even more ridiculous.

For instance, since last year USPS has actually been beta testing an amazingly illogical grocery delivery scheme in San Francisco. Additionally, just last week the USPS’s Office of Inspector General published a white paper suggesting that the Post Office could raise needed revenue by expanding it’s services to banking. Admittedly the last institution any rational consumer would want handling their finances is an institution that can’t handle it’s own finances.   

The ironic aspect of these revenue schemes is that a government entity is trying to raise revenue by expanding non-core related services (groceries and banking) in order to make up revenue losses from its core services (mail delivery). This is the literal equivalent of trying to put out a fire with gasoline.        

A more logical approach to improving the Post Office’s financial failures would be common sense reforms such as increasing spending transparency and accounting as well as simply focusing on the primary service it was created to provide – mail delivery.

Yet until action is taken on Capitol Hill to examine the financial shortcomings of the Postal Service, the only thing Americans can expect to be on time each year is increased waste and billions more being lost.  


Photo Credit: Brian Hefele  

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USPS Delivers Dubious Grocery and Banking Proposals to Taxpayers

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Posted by Justin Sykes on Thursday, May 28th, 2015, 4:47 PM PERMALINK

According to a white paper released last week by the Office of Inspector General (OIG) for the U.S. Postal Service (USPS), USPS is now considering expanding its services to banking in a last ditch effort to raise revenue. This announcement follows close on the heels of the USPS’s recent illogical efforts to expand services into grocery delivery.

For years the Postal Service’s finances have been in dire straights. The USPS reported second quarter losses this year of $1.5 billion marking the 24th quarter out of the past 26 they have posted massive revenue losses. They have additionally posted multi-billion dollar losses the last 8 years, signaling an inherent inability to efficiently manage the finances of the primary service it is charged with – delivering the mail.

Logically, one would think choosing to expand services to banking and grocery delivery could be a financial nail in the coffin given the USPS’s inability to keep their core mail delivery service out of the red. However the bureaucratic mindset seldom finds itself in the company of logic.

Thus instead of working to increase financial efficiency and decrease waste in existing services, the Postal Service is proposing to gamble taxpayer dollars away on revenue schemes well outside the purview of delivering mail.

For instance in the recently released white paper titled The Road Ahead for Postal Financial Services, the OIG suggests possibly expanding services to handing out loans, check cashing and even creating its own “full-fledged post bank.”

The USPS has also started beta testing a grocery delivery service in San Francisco meaning they are now competing against actual hard working entrepreneurs and businesses. However, unlike their competitors USPS is not susceptible to free market forces thanks to government backing, essentially making them “too bureaucratic to fail.”  

Not only do such practices disrupt the market and disregard the basic free market principles America was founded on but will also leave taxpayers holding the bag for the Postal Service’s future failures. 

Until lawmakers take action to reign in and reform the financial recklessness with which the USPS operates taxpayers can only expect billions more of their hard earned dollars to be wasted.     

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John Pilge

The Post Office once had a SAVINGS account option at every branch. I remember in the 1960's. It was available from the 1930's to about 1967. Expect some flak if they try it again. They removed copiers from the lobbies because of complaints from other stores with copiers.


Reduce management to the private sector levels and save 15 billion a year, it's as simple as that!

Top Five Reasons Congress Should Lift the Ban on Crude Exports

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Posted by Justin Sykes on Thursday, May 28th, 2015, 2:57 PM PERMALINK

Since the early 1970s the U.S. has had a ban in place on the export of crude oil. The ban was originally enacted to protect the U.S. supply of crude in response to decades of declining domestic production and issues in the international oil market during the 1970s.

Yet in recent years these concerns have become obsolete as the U.S. is now experiencing a renaissance in the production of crude thanks in part to improvements in extraction and exploration methods. In fact since 2008 U.S. crude output has increased a whopping 64 percent.

This massive increase in crude production has the potential to: reduce U.S. gas prices; create hundreds of thousands of new jobs; increase GDP; increase household incomes; and reduce the U.S. trade deficit.

However all of these benefits are contingent on whether Congress will act to lift the decades old ban on crude exports.          

1. Lower U.S. Gas Prices. Lifting the export ban would increase global crude supplies, in turn lowering global prices. Lower global prices would put downward pressure on domestic prices reducing the price Americans pay at the pump. A recent IHS report found lifting the ban would reduce gasoline prices 8 cents a gallon thereby saving drivers $265 billion over the next 15 years.        

2. Job Creation. As a result of increased economic activity from lifting the ban, average U.S. job creation is projected to reach up to 859,000 new jobs. Additionally, U.S. job creation resulting from lifting the ban is estimated to peak in 2018 at between 1 million and 1.5 million new jobs.

3. Increase Economic Growth. A recent study by the Government Accountability Office (GAO) found lifting the ban would increase the “size of the economy…employment, investment, public revenue, and trade.” This finding was echoed by similar studies that project lifting the ban would increase U.S. GDP by $73 billion in 2016 with an additional increase of $134 billion in 2018.     

4. Increase Household Income.  Due to the increased investment, job creation and low gasoline prices resulting from lifting the ban on crude exports, average disposable income per household would increase by $391 in 2018. A recent study by the Aspen Institute further found that real household income would increase up to $3,000 per household by 2025. 

5. Reduce U.S. Trade Deficit. Allowing crude exports would also have a profound and positive impact on the U.S. trade deficit.  Lifting the crude export ban would contribute to expanded U.S. exports. Such expansion is projected to narrow the U.S. trade deficit by $22.3 billion in 2020 through increased international trade of U.S. crude.   


Photo Credit: Bridget Coila

Photo Credit: 
Bridget Coila

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Federal Gas Tax Hike would Hurt Consumers and Encourage Overspending

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Posted by Justin Sykes on Thursday, May 14th, 2015, 1:50 PM PERMALINK

Just when American motorists thought it affordable to get back on the highways this summer, some Washington lawmakers are calling for massive increases to the federal gas tax. While there is currently a highway-funding gap, the answer is not to raise taxes but to reign in waste. Increasing the gas tax will not only worsen Washington’s spending problem, but will have American taxpayers picking up the tab.

Currently the federal gas tax is 18.4 cents per gallon and revenue from the tax goes into the Highway Trust Fund (HTF).  The HTF was originally created with the goal of financing and maintaining the nation’s highway systems. However in recent years HTF funds have increasingly been siphoned off to fund everything from bike paths to landscaping and -- most infamously -- squirrel sanctuaries.

Overspending on non-highway related projects has gotten so bad that spending of HTF funds is outpacing revenue from the gas tax. In fact the federal government spends roughly $50 billion annually while the gas tax only brings in around $34 billion each year. As a result, Congress has repeatedly had to add short term funding patches to maintain the HTF, with the most recent set to expire May 31st of this year.

With the looming May 31st deadline lawmakers are scrambling to find a solution, with some calling for an increase in the gas tax of up to 80%. One doesn’t have to be an economist to realize that the solution to overspending is not to increase the amount of money that politicians and bureaucrats have to overspend. Such a massive increase comes on the backs of taxpayers and avoids addressing the issue of overspending altogether.

Instead lawmakers should be looking to improve the fiscal responsibility with which HTF funds are spent, ensuring the funds go to what they were originally intended – the highways. For instance since 2008, federal spending on side projects has increased 38% while highway spending has remained flat. In fact using gas tax revenue to pay solely for highways would make the “HTF 98% solvent for the next decade” without increasing taxes.      

Additionally, increasing the gas tax would hit low to middle-income Americans the hardest. Most Americans are currently enjoying increased discretionary income each month due to historically low gas prices. When Americans have more to spend that extra income benefits the economy as a whole. Yet if some in Washington have their way that extra income would instead go to Uncle Sam where it would likely fund more wasteful spending on non-highway related projects.        

It’s clear there is a need for a solution to the inherent lack of fiscal responsibility in the way HTF funds are spent, a solution that doesn’t work to the benefit of government bureaucrats at the expense of American taxpayers. Thus it should also be clear to lawmakers that increasing the gas tax to pay for their fiscal transgressions is outrageously irresponsible, would reduce the discretionary income of millions of hardworking Americans and is simply not the answer. 

Photo Credit: Drew Stephens

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Sen. Inhofe’s EPA Employment Impact Analysis Act Holds the EPA Accountable

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Posted by Justin Sykes on Monday, April 7th, 2014, 12:30 PM PERMALINK

U.S. Senator Jim Inhofe (R-Okla.), a senior member of the Environment and Public Works (EPW) Committee, introduced SB 2161 last week to rein in the EPA and ensure future EPA regulations are enacted in a responsible manner.

The EPA Employment Impact Analysis Act would require the Environmental Protection Agency (EPA) to conduct an economic impact analysis on current air regulations before future ones may be enacted. An economic impact analysis is already required under the Clean Air Act; however the EPA has never once actually complied with the mandated procedure.

Pursuant to Section 321(a) of the Clean Air Act, the EPA is required to report how current air regulations are affecting job creation in the United States. “The EPA has not once abided by this provision and failed to complete a single analysis on its air rules to date."This fact is not only an egregious violation of the EPA’s own policy but is also concerning given the widespread impact EPA regulations have on the U.S. economy.

Senator Inhofe’s bill would simply require the EPA to follow its own procedures as outlined in the Clean Air Act. Specifically, the bill would prohibit the EPA from “finalizing any major regulation until the agency analyzes the economic impact of its current air regulations as required under Section 321(a) of the Clean Air Act.” Essentially the EPA would have to consider the effects current regulations are having on the economy before justifying the creation of future regulations.  

The problem is the Obama EPA has implemented costly regulations while failing to maintain research on any effects of such regulations on the U.S. economy. Inhofe cites a number of examples where “the EPA concluded that a regulation would result in the creation of jobs, yet the National Economic Research Associates (NERA) Economic Consulting firm…reported that the same regulation would result in thousands of job losses.” Senator Inhofe cites 3 specific examples in support of the bill:

  • Utility MACT rule (77 Fed. Reg. 9301): EPA's analysis of the Utility MACT rule estimated that implementation of the final rule would result in the creation of 46,000 temporary construction jobs and 8,000 net new permanent jobs. NERA's whole economy analysis found that the rule would have a negative impact on the income of workers in an amount equivalent to 180,000 to 215,000 lost jobs in 2014, and 50,000 to 85,000 lost jobs each year thereafter. 
  • Cross State Air Pollution rule (76 Fed. Reg. 48208): The EPA’s analysis of the Cross State Air Pollution rule estimated that implementation of the final rule would result in the creation of 700 jobs per year. NERA ‘s whole economy analysis found that the rule would result in the elimination of a total of 34,000 jobs from 2013 to 2037.
  • Boiler MACT rule (76 Fed. Reg. 15608): EPA’s analysis of the Boiler MACT rule estimated that implementation of the final rule would result in the creation of 2,200 jobs per year. NERA’s whole economy analysis found that the rule would result in the elimination of 28,000 jobs per year from 2013 to 2037. 

The discrepancies between the EPA’s projected effects of such regulations on the economy and the actual amount of jobs lost is mind boggling. All in all NERA’s analysis of the economic impact of the three regulations cited above found the regulations together would likely kill 2,876,000 million jobs by 2037. The almost three million job losses projected by NERA strongly contrasts the job creation numbers projected by the EPA. It must also be pointed out that the aforementioned examples are only three EPA regulations out of the multitude of EPA regulations currently in place.      

If the EPA had been adhering to its own procedures and analyzing the effects of regulations as required by the Clean Air Act hundreds of thousands of jobs as of 2014 could have been saved. Senator Inhofe’s bill would ensure that the EPA monitors and reports on the effects of its own regulations so failed regulations do not continue to have detrimental impacts on the American economy. 

Simply put, Senator Inhofe’s bill would save jobs, taxpayer dollars and ensure the EPA enacts responsible regulations.

Photo Credit: 
Moms Clean Air Force https://www.flickr.com/photos/momscleanairforce/

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Supreme Court's EPA Deference Could Kill the Pebble Mine

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Posted by Justin Sykes on Monday, March 24th, 2014, 3:08 PM PERMALINK

The U.S. Supreme Court has refused to hear an appeal of an Environmental Protection Agency (EPA) decision that revoked a 2007 mining permit issued for the Spruce Mine in West Virginia. The court’s failure to hear the case sets a dangerous precedent that may allow the EPA to preemptively kill future projects such as the proposed Pebble Mine project without formal justification. The refusal to rule on the EPA’s revocation of the Spruce Mine permit impliedly grants the EPA more control over the American economy and denies legal recourse.

The current state of the law in America is that for a mining operation to begin it must apply for a Section 404 permit as required under the Clean Water Act. Mining production cannot begin until the Section 404 permit is issued. The Section 404 permit process effectively gives the EPA ultimate veto authority over a proposed mining project. “Before developers can even begin mining, they must first identify economically viable resources…lease land from the government or private individuals, and then apply for drilling permits with a handful of different agencies.

The problem is that mining projects require years of preparation and millions of dollars of investment that could be wasted because the EPA can now kill such projects without any justification. The current state of the law will undoubtedly chill future investments thereby killing jobs and denying America the benefit of its domestic energy reserves. Based on the EPA’s unfounded and retroactive revocation of the Spruce Mine permit, it’s easy to predict the future for such projects such as Pebble Mine in Southwest Alaska.

The Pebble Mine project is a proposed mining operation that is now in danger of being preemptively denied by the EPA. The most troubling aspect of the EPA’s treatment of the Pebble Mine project is that Pebble Mine has yet to formally apply for any construction permits. In an act of defiance to any logical or fair interpretation of the law, the EPA issued a watershed assessment of the region before any formal application for permits were made. Furthermore, the EPA’s watershed assessment of the region was based on inaccurate science and methodology, and was simply a calculated effort to kill the project without fair consideration. 

It is clear the EPA is acting at the behest of radical environmental organizations to squash the Pebble Mine project. What the EPA failed to take into consideration is that the “Pebble Partnership has invested over $150 million in developing a safe, environmentally responsible way to mine the enormous copper reserves in Southwest Alaska.” The EPA also failed to consider that the Pebble Mine would:

  • Create 16,175 high-paying jobs per year throughout construction process and an additional 14,715 high-paying jobs per year during production; and
  • Contribute $1.6 billion to our nation’s GDP per year during the construction process and an additional $2.4 per year afterwards.

The EPA’s preemptive efforts to kill the Pebble Mine project through its watershed assessment are made worse by the recent precedent set by the Supreme Court. The Supreme Court’s denial of the Spruce Mine’s appeal of the EPA’s permit revocation means future projects could be killed by the EPA without proper justification. Essentially the Supreme Court is condoning the EPA’s abuse of the permitting process and offering little if any recourse for mining operations.

The EPA’s condoned abuse of the permitting process could allow the EPA to revoke the Pebble Mine permit at any time, irrespective of the project’s investments in safety, the thousands of potential jobs created and the billions in contributions to America’s GDP. The Supreme Court’s decision only reinforces an already growing view that the EPA is an agency “gunning for one industry” despite the obvious benefits that would be produced from projects such as the Pebble Mine. Thus the fate of projects such as Pebble Mine could be in the hands of an anti-mining EPA that can deny or revoke permits without any justification or legal recourse for mining operations.

Photo Credit: 
Thomas and Melody Banneck https://www.flickr.com/people/tbanneck/

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EPA's Biggest Con Artist Wrote Seminal EPA Regulation

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Posted by Justin Sykes on Thursday, March 20th, 2014, 11:40 AM PERMALINK

A report released this week by the Senate Committee on Environment and Public Works examined former EPA employee John Beale and his role in the creation of the 1997 National Ambient Air Quality Standard (NAAQS). The report revealed that at the time the NAAQS was being drafted by the EPA, “some officials making critical important policy decisions were not remotely qualified…and in at least one case – EPA decision making was delegated to a now convicted felon and con artist, John Beale.”

The National Ambient Air Quality Standard regulates the release of particulate matter into the air and is one of the most controversial regulations ever put forth by the EPA. The NAAQS allowed for a massive expansion of EPA control over the American economy.

The NAAQS was the brain child of Robert Brenner and convicted con artist Jon Beale, inherently raising questions as to the entire authenticity of the NAAQS. The report found multiple problems behind Beale’s pivotal role in the creation of the NAAQS. The report found evidence of:  (1) problems with the integrity of the research behind the NAAQS; (2) self-serving motivation behind its creation; and (3) an overall lack of legislative or scientific experience on the part of Beale – the primary figure behind the NAAQS’s creation. 

Beale’s Lack of Experience

It must first be understood that John Beale was at no point qualified to draft EPA regulations, especially regulations as far reaching as the NAAQS. The committee’s report found Beale came to work at the EPA through his best friend John Brenner who hired Beale.

Brenner hired Beale despite the fact that Beale had absolutely “no legislative or environmental policy experience and [previously] wandered between jobs at a small-town law firm, a political campaign, and an apple farm.” The report even found that “Beale himself admitted that he had no environmental experience.” Brenner hired Beale at a position commonly reserved to those with years of legislative and environmental experience. The position was also one of the highest paying positions for general service employees. Thanks to Brenner’s influence, Beale’s role in the EPA quickly grew to the point where he became the “lead EPA official for one of the most controversial and far reaching regulations ever issued” despite his complete lack of experience.

Beale’s Motivation Behind the Creation of the NAAQS

The committee’s report further found that Beale’s primary motivation behind the creation of the NAAQS was not the preservation of the environment, air quality or human health, but his own self-interest. 

“Evidence suggests that Beale used the NAAQS as a vehicle for his own self-aggrandizement and rose above reporting just to Brenner and began to work alongside Mary Nichols, the Assistant (AA) for OAR at the time, as well as then Administrator Carol Browner.” 

Once Beale had influence over Nichols (the Assistant Administrator) and Browner (the EPA Administrator), there was no stopping him from passing the NAAQS, not even a complete lack of scientific basis and support.

The NAAQS is Based on a Lack of Scientific Integrity and Understanding

The report further found that not only was the NAAQS developed by Beale whose only legislative qualification was an “unpaid undergraduate internship for Senator John Tunney,” but also that Beale based his creation of the NAAQS on “a distinct lack of scientific understanding of the integrity of the underlying data.”

The EPA relied on two studies presented by Beale in approving the NAAQS that remain controversial: The Harvard “Six Cities” and American Cancer Society (ACS II) studies. The EPA’s own scientific advisors warned EPA officials that the studies were “not in the peer-reviewed literature” and “emphasized that there were significant uncertainties with the data, meaning EPA’s decision to proceed with the standards was a pure ‘policy call.’” Subsequently, the EPA Administrator at the time Carol Browner and Assistant Administrator Mary Nichols both admitted “neither of them had actually read the studies.” The report found that instead of reading the studies, both Browner and Nichols deferred to the “expertise of EPA’s career staff – Beale and Brenner – to make [the] policy call.”

While the goal of the NAAQS appears noble, the creator, science and motivation behind the NAAQS is anything but. 

Photo Credit: 
Emydidae http://www.flickr.com/people/neoyogyrt/

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Ohio Should Follow Indiana’s Lead and End its Electricity Mandate

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Posted by Justin Sykes on Thursday, March 13th, 2014, 10:05 AM PERMALINK

The state of Ohio should take note of the recent legislative accomplishments in Indiana with regard to Indiana’s electricity reduction mandate.  Ohio currently has in place the Ohio Electricity Usage Reduction Mandate, which requires Ohio’s electricity distribution utilities (EDUs) to reduce their customer’s electricity usage in increasing amounts each year. Similar to the Ohio energy reduction mandate, the state of Indiana has an energy reduction mandate called the “Energizing Indiana” program. Unlike Ohio however, Indiana has realized that the costs of the reduction mandate greatly outweigh any potential benefits to rate payers and businesses.

Recently, Indiana State Senator Jim Merritt “authored a bill that would phase out the Energizing Indiana program by the end of the year.” As of Monday, Senator Merritt’s bill passed the Indiana General Assembly with a 37 to 8 vote.  Senator Merritt’s bill will now be presented to Governor Mike Pence for approval, and if approved Energizing Indiana would be phased out by December 2014. Gov. Pence, being the good conservative that he is, would do well to make this legislation law.

In support of the bill, Senator Merritt cited the fact that “since 2009, the Energizing Indiana program has cost rate payers $500 million and will cost as much as $1.9 billion more by 2019.” As a direct result of the Indiana mandate, residents were being charged $1.50 per month to fund Energizing Indiana.

Alternatively, Ohio residents are paying almost three times the amount of Indiana residents to fund the electricity reduction mandate. Currently Ohio rate payers are paying almost $4.00 a month for an energy reduction benefit of only $0.37 cents a month. The discrepancy between the cost and benefit of the Ohio mandate is blatantly obvious in that paying $4.00 for something worth only $0.37 cents is clearly illogical.

Additionally, the compliance burden under the Ohio electricity reduction mandate is so great that that Ohio EDUs will have spent over $1 billion in compliance costs by the end of this year.  Because the Ohio mandate increases each year, Ohio EDUs compliance budgets are increasing 12 percent each year in response. In turn, those compliance costs are passed onto Ohio rate payers. If the current 12 percent compliance budget growth rates continue, by 2020 “Ohio ratepayers will be paying over $500 million per year as a result of the Ohio mandate.

To show just how much of the cost of the Ohio electricity reduction mandate is passed on to Ohio residents, take a look at the Ohio EDU AEP-Ohio Columbus Southern (AEP-Ohio). AEP-Ohio began charging residential customers 0.289 cents per kWh ($0.00289) in September of 2012 to fund its energy use reduction mandate budget. A typical AEP-Ohio customer using 750 kWh per month would incur a charge of $2.17 per month to fund the energy reduction mandate. Thus, “the mandate cost paid by a typical AEP-Ohio Columbus Southern zone residential customer was at least seven times greater than the price suppression benefit.” Essentially, AEP-Ohio customers are required to pay one dollar for every 15 cents of claimed price suppression benefit they received. The results are the same compared to other Ohio EDUs. Dayton Power & Light residential customers were forced to pay $3.90 per month for a $0.37 cent benefit.

Just like Indiana’s Energizing Indiana program, the Ohio electricity reduction mandate is all cost and no benefit for consumers and businesses. Indiana Senator Merritt stated in support of his repeal bill that if “energy efficiency policies aren’t leading to cost savings, they aren’t doing their job.” Clearly, the Ohio electricity usage reduction mandate is an energy efficiency policy that isn’t doing its job. As such, Ohio should follow suit and take action to repeal the Ohio electricity reduction mandate before Ohio consumers and businesses further suffer. 


Photo Credit: Charles E. Carstensen (photo has been resized)

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EPA Bureaucrats Use Federal Charge Cards for Gym Memberships and Gift Cards

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Posted by Justin Sykes on Wednesday, March 12th, 2014, 8:56 AM PERMALINK

A report released by the Environmental Protection Agency’s Inspector General has found that EPA employees have improperly used federal charge cards to purchase everything from gym memberships to gift cards. The report indicated that over 90 percent of the sampled transactions were for prohibited, improper, or erroneous purchases, all paid for by American taxpayers. Ironically, Senate Democrats Monday night carried on an all-night filibuster in the hopes of generating even more power and funding for the EPA.

In order to compile the report, the Office of the Inspector General obtained a spreadsheet of 67,000 EPA transactions from Fiscal Year (FY) 2012, and randomly selected 69 transactions. They additionally selected 11 transactions that seemed inappropriate because of the name of the merchant involved. For instance, some transactions were with merchants listed as dance halls, child care organizations, music venues and theatres. Of the 80 transactions sampled, 75 were for prohibited, improper, or erroneous purchases. The 80 transactions sampled totaled $152,602 and $79,254 (52%) of which were for prohibited, improper, or erroneous purchases.

The report outlined nine specific internal control oversight issues, ranging from the approval of prohibited transactions by EPA officials to the outright failure to maintain transaction records. Of the primary internal control oversight issues, four were particularly outrageous, and the report found that of the transactions sampled:

  1. 35% of cardholders did not verify the receipt of purchases;
  2. 30% of cardholders did not obtain required approval prior for purchases;
  3. 25% of cardholders did not obtain funding prior to purchases; and
  4. 18% of approving officials never reviewed purchase logs.

Some specific instances of EPA employee misconduct were so egregious they are worth mentioning. In three instances, cardholders purchased gym memberships totaling $2,867. Two of those purchases were not even for EPA employees but for family members. Cardholders further violated EPA guidelines regarding inappropriate food purchases:

“Although light refreshments are defined as those that do not include portions of food typical of a meal, in one of our samples, light refreshments included all elements of a meal for an awards ceremony. Four different appetizers, chicken tenderloin, fresh fruit, pasta salad, large cookies, soft drinks and punch were purchased at a cost of $2,900. Meals are not an allowable expense for an awards recognition ceremony.”

The report also found that the purchase of gift cards by EPA cardholders was also a problem in seven transactions. For example, in one transaction 20 American Express gift cards were purchased totaling $1,588. Additionally, the report highlighted an instance where EPA employees blatantly violated records keeping requirements in that:

“Two transactions totaling $26,152 could not be located despite instructions to maintain supporting documentation. The EPA’s policy requires the retention of documentation for 3 years on a fiscal year basis. Cardholders were not attentive to this basic requirement. In two cases, the cardholders left their positions and no arrangements were made to retain the records. In another transaction the cardholder stated that records were not kept because of privacy concerns. This lack of documentation increases the risk that purchases could be fraudulent, improper or abusive.”

It must also be pointed out that the report focused on only 80 transactions out of 67,000, ninety-two percent of which turned out to be prohibited or improper. For FY 2012, the EPA had "1,370 active cardholders that transacted more than $29 million in purchases." The EPA also had "309 convenience check writers who wrote more than 1,000 checks totaling more than $500,000." It is very likely the 80 transactions sampled are just the tip of an iceberg characterized by improper and wasteful spending of federal funds.

The ultimate irony is that a similar report conducted in 2008 found the exact same internal control weaknesses as those found in the most recent report conducted by the Inspector General. Due to an obvious inability of EPA officials to correct these internal control weaknesses, there is no guarantee that any of the prohibited and improper conduct by EPA employees will change.

An obvious culture of improper spending has developed at the EPA with little to no oversight. Thus in years to come Americans could again find themselves paying for EPA employees’ gym memberships, gift cards, and whatever else may strike their fancy.


Photo credit:  Neon Tommy (Photo has been resized)

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