The fact check prompted a response from Lance Brown, executive director of a Montgomery-based non-profit group called the Partnership for Affordable Clean Energy. Brown took exception to many of the statements in Bama Fact Check’s article, and submitted a response. While we don’t agree with Brown’s take, the editors of Bama Fact Check love open debate almost as much as we love providing raw documents to our readers. Brown’s response is printed below, with links to documents Brown cites in the piece.
Bama Fact Check gets it wrong
By Lance Brown
Executive Director, PACE
In a recent installment of Bama Fact Check, Anniston Star reporter Tim Lockette dissects an opinion piece penned recently by new Alabama Public Service Commissioner Twinkle Cavanaugh. And while Lockette takes issue with what he considers to be Cavanaugh’s lack of citation, he clearly misses the point that environmental regulations, especially the ones poised to take effect, are extremely costly.
Cavanaugh writes that “consumers are being forced to pay billions of additional dollars for electricity simply because of laws and regulations passed by Congress or imposed by the Environmental Protection Agency. And, if the EPA has its way, more increases will find their way into your power bill very soon.” Lockette gives this claim a 3 out of 5 rating, but we believe the claim to be completely accurate.
In his fact check, Lockette considers only the cost of environmental regulation to residential customers, which he estimates to be around $346 million per year. But by Lockette’s own admission, residential customers pick up less than half of the tab. When one considers all electricity consumers, not just in Alabama but across the Southeast and the U.S., the cost of environmental compliance is well into the billions.
Lockette also misses Cavanaugh’s overarching point and the source of her consternation, which is that EPA regulations are becoming only more costly to American families and businesses. If his fact checking is to be taken seriously, Lockette should familiarize himself with the 2,000 pages of testimony submitted to House Oversight Committee Chairman Darrell Issa in recent days, which details analytical and anecdotal evidence from groups such as the American Farm Bureau, the US Chamber of Commerce, the National Federation of Independent Business, and the National Association of Manufacturers. The common message from all of those groups: pending EPA regulation is a tidal wave whose surge is going to wash away American jobs and leave higher consumer prices in its wake.
Lockette might also consider reading a recent IHS Global Insight study that estimates new industrial boiler rules could cost 16,000 American jobs for every $1 billion spent on boiler technology upgrades. In total, the study estimates U.S. job losses between 152,000 and 798,000 jobs, depending on the severity of EPA's rulemaking. A found that new boiler rules could result in the loss of nearly 72,000 American jobs in the pulp and paper industry and its supply chain. Last week, PACE joined many of Alabama’s heavy manufacturers, many of whom operate boilers, to explain to members of Congress just how burdensome – and costly – these rules are.
But EPA’s new regulations go far beyond boilers. Consider a recent article from the Mobile Press-Register that details how EPA’s new ozone standards will likely place the Mobile area under non-attainment, creating limits of job growth and an even deeper economic hole for the region. Or consider EPA’s pending move to classify coal ash as a hazardous waste, which threatens to either make Alabama’s most inexpensive source of electricity, coal, far more expensive or put that energy resource – 70% of Alabama’s current portfolio, by the way – on the back burner altogether. At every turn, EPA regulations cost consumers and businesses. Cavanaugh couldn’t be more correct.
And if Lockette misses the mark on environmental regulation cost, and we clearly believe he does, he is even more out of touch on the larger political issues concerning energy. For example, Lockette claims that a geographic power struggle was not at the center of the CO2 Cap and Trade debate. However, PACE’s analysis of data produced in March 2009 by the House Ways and Means Committee shows that electricity consumers in the Southeast would have paid 44% more than the national average under a Cap and Trade system. According to that data, the per capita increase to Alabama electricity consumers would have been more than $1,500 per year. The same consumers in California, the home of the legislation’s chief architect, would have paid only $126 more per year.
Maybe Lockette missed that the two sponsors of the landmark Waxman-Markey bill were from California and Massachusetts, respectively, and that voting broke clearly along geographic lines, with the exception of a few Southern Democrats. The one-size-fits-all policy that would have been created by Cap and Trade was unabashedly punitive to states like Alabama. While the Department of Energy ranks Alabama among the top five states in production of renewable energy, the Waxman-Markey bill would not have allowed producers in the state to fully count existing hydroelectricity or other carbon-free sources of electricity such as nuclear power. The bill also failed to recognize the significant renewable power produced by pulp and paper companies during their production process.
When Congress failed to make Cap and Trade law, it became clear that the only way for the administration to pass its agenda would be via the EPA. Lockette doesn’t consider this to be accurate, but he is in the minority. From Clean Air Act rules to tougher ozone standards to coal ash regulation, the EPA is more aggressive than ever. And in many ways, this unchecked action by EPA could be far worse than anything Congress could have passed.
Lockette shoots down the high cost of EPA regulation by citing a PSC document that states environmental costs will rise by $7 million in 2011. But who knows what they will cost in the future? There is no doubt that some of these regulations will directly affect power rates, especially those that target power producers. Lockette selectively cites a 1.5% increase from the new EPA Clean Air Transport rule, but what about boiler rules? What about tougher ozone standards? What about new maximum control rules and coal ash regulations for utilities that fundamentally change the way we produce energy in Alabama and beyond?
The truth is that no one knows what these rules and regulations will cost, but an estimate of 30-40% is in line with what a number of national groups estimate. And added to the direct cost on power bills will be the cost to Alabama’s businesses and to the consumers who pay the toll, as they always do, when the price of doing business goes up. We are just now seeing, as in the case of Mobile and potential ozone non-attainment, the front end of a devastating EPA wave.
While we recognize that Lockette’s task was to deal with the data provided by Commissioner Cavanaugh, we feel he was more interested in proving the commissioner wrong than pursuing the underlying truth of this important story. He seemed more interested in parsing her words than listening to the deafening chorus of voices sounding the alarm about increased EPA regulation. To her credit, Cavanaugh is listening, and so are the members of Alabama’s congressional delegation. In our opinion, they deserve applause, not disdain and dissection, for speaking up.
(Lance Brown is executive director of Partnership for Affordable Clean Energy and writer of an energy column for The Daily Caller.)