Coal, Emissions, Gas, Policy & Regulations

Report: EPA’s Clean Power Plan will raise energy prices

The cost of electricity and natural gas will increase by nearly $300 billion in 2020 compared to 2012 prices, according to the “Energy Market Impacts of Recent Federal Regulations on the Electric Power Sector,” report conducted by Energy Ventures Analysis, Inc.
 
The report states the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan will force annual residential electricity and natural gas costs to rise by $680, or 35 percent, from 2012 compared to 2020, increasing every year. States that have implemented deregulation of wholesale electric power markets, where the price of electricity will rise to the marginal cost to support new generating capacity, will be the most affected. The study predicts electricity costs will increase by $177 billion and natural gas will see an increase of $107 billion in 2020 compared with 2012. The industrial sector will be significantly impacted with costs approaching $200 billion in 2020, nearly double the cost from 2012.  

“Our analysis is the first to fully examine the combined economic impacts of the EPA’s long list of proposed and finalized regulations on the electric power industry, including the Mercury and Air Toxics Standards, regional haze regulations and the Clean Power Plan, whose four building blocks are based on flawed assumptions,” said Seth Schwartz, Energy Ventures Analysis, Inc. President.  “For example, existing coal-fueled generating facilities are already operating at very efficient levels and, collectively, will not be able to achieve an additional six percent heat rate improvement.”

Energy Ventures Analysis concludes that U.S. power markets will see a shift from coal to natural gas, causing upward pressure on natural gas demand and prices.

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