Power lines CPP

Under Obama, the EPA has become drunk with power through policies that increase the agency’s overregulation and control of the economy. With its budget of more than $8 billion annually, the EPA under Obama has evolved into one of the most vast and onerous federal agencies. The EPA is winning the race to regulate the economy, passing the most regulations with the largest costs to taxpayers than any other federal agency. This year alone, the EPA put forth rules to regulate ozone, methane, and even water.

Eclipsing all of these regulations lies what could be the most expensive regulation in history, the Clean Power Plan (CPP). Like many of the EPA’s burdensome regulations, the CPP levies high costs to taxpayers and stymies economic progress.  Recently, NERA Economic Consulting released a new study forecasting the economic effects of the CPP.

Not surprisingly, NERA found that the CPP would be overwhelmingly harmful to consumers and the economy as a whole. The CPP will levy high compliance costs on utilities and increase electricity rates across the board, in turn impacting state’s ability to provide residents with affordable and reliable energy.

The CPP will force electrical utilities to pay hefty compliance costs. NERA predicts that compliance costs could sky rocket up to $479 billion over 2017-2031. Annual compliance costs are projected on average to range from $41 billion to $73 billion. These high costs will force many utilities to raise rates, harming consumers with massive increases in their electricity bills. Faced with insurmountable costs, some utilities will be forced to close, impacting the ability of thousands of Americans to receive reliable energy.

The report also found that the CPP will increase electricity rates in every state in the continental U.S. For 40 states average electricity prices will increase by more than 10%. These higher electricity rates will have a profound impact on American households, decreasing household spending power between $64 billion and $79 billion. A greater share of a family’s income will now go towards electricity bills than ever before. As household income shrinks under higher energy costs, some of the nation’s most vulnerable could be forced to choose between heating their homes in the winter or paying for other necessities such as food and medical care.  

The Clean Power Plan will also disproportionately harm the coal industry. In total, the U.S. could lose more than one-third of all coal-fired power plants by 2020. This would prove extremely harmful to the coal industry as a whole, and leave tens of thousands of workers without jobs. The CPP is yet another overbearing weapon in Obama’s regulatory repertoire.

These new findings provide greater insight into the disastrous economic effects of the CPP. Thus it should come as no surprise 27 states are currently challenging the EPA in court over this onerous example of federal regulatory overreach.

As the report shows, not only will the CPP increase compliance costs by hundreds of billions and send energy rates skyrocketing, but will reduce household income and American’s access to reliable and affordable energy.


Find out how much the CPP will raise electricity prices in your state here.


Photo Credit: Chris Hunkeler