The new federal Clean Power Plan will increase energy costs and stiffen barriers to producing manufactured goods in the United States, according to Industrial Energy Consumers of America (IECA).
“We think this plan will be costlier for manufacturing companies than what the federal government says,” IECA President Paul N. Cicio recently told EP News Wire.
Specifically, the U.S. Environmental Protection Agency (EPA) on Aug. 3 finalized the Clean Power Plan rule, setting standards to cut carbon pollution from existing power plants
The rule imposes higher costs that are spread over fewer generated electrons, thereby increasing the cost per unit of generating electricity for the manufacturing sector, Cicio said of IECA member companies.
“These are price-sensitive companies so that’s why we’re involved” in opposing the Clean Power Plan, he told EP News Wire.
Even small changes to energy prices negatively affect IECA manufacturing companies, which as energy-intensive trade-exposed (EITE) industries are among the largest users of U.S. energy within the manufacturing sector, Cicio said.
Increased costs on the manufacturing sector weigh heavily on investment, job creation and global competitiveness, he added, creating additional costs for producing manufactured goods.
Such costs will get passed on to U.S. consumers, who will pay higher prices for goods, as well as higher rates.
For instance, when a state’s electricity prices rise, manufacturing facilities with multiple locations will likely shift their production to other states with lower electricity costs. The subsequent reduction of industrial load then will also increase costs to all other ratepayers in the state, Cicio said.
Another problem IECA has with the Clean Power Plan is that it establishes state-by-state targets for carbon emissions reductions, as well as a framework for how states may meet these targets by 2030. States must submit a final plan to reduce carbon emissions, or an initial plan with a request for an extension, to the EPA by Sept. 6, 2016.
“We think the federal government is taking a strong dictative stance in this rule by removing state electric-system decision-making from the hands of the states,” Cicio told EP News Wire. “And we also think this is illegal.”
Cicio said the Clean Power Plan “regulates emissions outside the fence line," meaning regulatory action that the EPA has never taken before.
“This concerns us because it sets a precedent on how the manufacturing sector will be regulated in the future," he said. "We see this as problematic.”
Moving forward, he said IECA will support new and ongoing litigation against the Clean Power Plan, while at the same time working with states to encourage low-cost compliance with the EPA rule.
“As states develop their plans to comply with the final rule, we will work with them to keep costs as low as possible,” Cicio said.
Currently, some two dozen states have filed suit in a pending case to block the EPA regulations, while the U.S. House of Representatives earlier this month voted 242-180 to pass a Senate joint resolution to scrap the Clean Power Plan. IECA supports the Senate joint resolution.
Meanwhile, in a separate-but-related Clean Power Plan issue, the EPA in October released a proposed federal plan for implementing the greenhouse gas (GHG) emission guidelines (EGs) for existing fossil fuel-fired electric generating units (EGUs) under the Clean Air Act. Comments on the plan are due by Jan. 21.
For information on the proposed federal plan and for details on submitting comments, goto: www.federalregister.gov.