New Jefferson Institute Study:
EPA Regulations will raise electric rates 25%;
Cost 38,000 Virginia Jobs
3/31/2015 -- New EPA Regulations expected to be made final this summer will result in higher electric bills and a loss of 38,000 jobs.
That's the conclusion of a new study released today by the Thomas Jefferson Institute and researched by economists at the Beacon Hill Institute in Boston. Under EPA regulations, Virginia will be required to reduce its CO2 levels by 38 percent from 2012 levels at a cost of $1.7 billion by 2030. As a result of the added costs, electric bills are expected to increase by 25 percent and the state would lose more than 38,000 jobs that would not be lost if the EPA regulations were not implemented in the Commonwealth.
"At a time when Virginia is clawing its way out of the recession, these costs will hve a devastating impact on Virginians," said Michael W. Thompson, chairman and president of the Thomas Jefferson Institute. "With a major legal challenge expected immediately after the final regulations are published - and a resultant two-year court battle - the prudent course of action would be for the General Assembly to refuse to implement a state plan under the new federal regulations."
The rules for new plants would limit CO2 emissions to 1.1 pounds (lbs.) per kilowatt hour (kWh) of electricity production. This is less than half of the current average of 2.14 lbs. per kWh. The rule on existing coal plants would set the national goal of reducing CO2 emissions per megawatt hour of energy produced by 30% below the 2005 levels by 2030. In Virginia the goal is a reduction of 38% based on 2012 levels according to Dr. David Schnare, an environmental attorney who spent almost 30 years at EPA and now heads the Energy and Environment Legal Institute. The mercury rule sets an emissions limits range from between 0.0002 lbs. per Gigawatt hour (1,000,000 kilowatt hours) to 0.04 lbs. per Gigawatt hour.
The Beacon Hill Institute used its STAMP (State Tax Analysis Modeling Program) to estimate the economic effects of the EPA rules, concluding that the CO2 emission rule on new power plants will cost Virginia $336 million in 2030; the rule for existing plants will cost $592 million and a mercury emissions rule will cost $817 million - a total of more than $1.7 billion.
The Beacon Hill/Thomas Jefferson Institute study concludes that the increased energy prices would inflict significant harm on the Virginia economy, with the state shedding 38,115 jobs by 2030. The job losses and price increases would combine to reduce real incomes as firms, households and governments spend more of their budgets on energy and less on other goods. As a result, real disposable income would fall by $4.451 billion by 2030, and annual investment in the state would fall by $515 million. The investment losses are mildly offset by increased investment in other electricity technologies.
"These EPA rules are aimed at reducing CO2 emissions by either shutting plants down or making their cost uncompetitive, and the higher electricity costs threaten the state's industrial base," Thompson concluded. "Virginia policymakers need to be aware of the serious consequences that come with these EPA rules."
A copy of the report is found by clicking here.
Contact: Micheal W. Thompson
M: (703) 608-9447