Statement by the ERCC: New Analysis Finds EPA Regs Would Increase Electricity Costs, Lose Jobs

July 7, 2011

A new analysis by National Economic Research Associates (NERA) says two of the EPA's proposed regulations would be among the most expensive ever imposed by the agency on coal-fueled power plants, dramatically increasing electricity rates and natural gas prices and leading to substantial job losses. The analysis was sponsored by the American Coalition for Clean Coal Electricity (ACCCE), but relies on government data for almost all of its assumptions.

NERA projects that EPA's proposals would result in employment losses of over 1.4 million job-years by 2020 and increase electricity rates by over 23 percent in some areas of the United States. A job-year is one job for one year. In addition, consumers will be paying over $8 billion per year in higher natural gas prices because of the proposed rules. NERA analyzed the combined economic impacts of the EPA’s proposed Transport Rule and its Maximum Achievable Control Technology (MACT) requirements for power plants. The analysis projects that the two regulations alone would cost the American electric sector nearly $18 billion per year, making them some of the most expensive EPA regulations ever imposed on power plants and leading to higher electricity rates and lost jobs.

If enacted, the regulations would lead to nationwide employment losses totaling 1.44 million job-years by 2020 and increase Americans' average electricity bills by 11.5 percent. In some parts of the United States, rates would climb by almost 24 percent.

Earlier this year, ACCCE released a report showing electricity has experienced relatively low price increases since 2001, compared to other energy sources used by American households. Coal currently provides nearly one-half of America’s electricity supply, and has contributed to the relative stability of consumer electricity prices.