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Monday, January 09, 2012

Courts Delay Costly EPA Rule

The relentless regulatory assault by the Environmental Protection Agency (EPA) on energy producers and consumers - including small businesses - ran into an obstacle in a federal appeals court on December 30.

An EPA rule finalized in July would require power plants in 27 states to slash sulfur dioxide and nitrogen oxide emissions that potentially cross state lines. Scheduled to go into effect on January 1, the U.S. Court of Appeals for the District of Columbia Circuit granted a stay on the rules until legal challenges to the rules are decided.

As The Wall Street Journal reported that "the cross-state rule would have required pollution reductions in 2012. To comply, companies with older coal-fired power plants would have had to run those plants less often or pay for credits to offset the pollution."

In September, the American Coalition for Clean Coal Electricity released a study by National Economic Research Associates focused on the EPA's Cross-State Air Pollution Rule and proposed Maximum Achievable Control Technology, coal combustion residuals, and cooling water intake requirements for power plants. Over the 2012-2020 period, the study estimates a $21 billion per year cost to the power industry, a loss of 183,000 jobs annually, double-digit increases in electricity costs in many regions of the U.S., and a reduction in disposable income of $270 a year for the average American family.

BusinessWeek reported: "More than three dozen lawsuits in the Washington court seek to derail the EPA's Cross-State Air Pollution Rule, which was issued in July and revised in October. The court hasn't scheduled a date for argument, though today's order suggested the judges would hear the case by April. Southern Co., EME Homer City Generation LP, a unit of Edison International, and Energy Future Holdings Corp. units in Texas are among the power companies challenging the rule. The state of Texas, the National Mining Association and the International Brotherhood of Electrical Workers joined in parallel cases, saying the rule puts an undue financial burden on power producers and threatens electricity reliability by forcing companies to shut some older plants."

Also among the arguments challenging the EPA rules is that, under the Clean Air Act, states are empowered to set their own pollution guidelines.

The broad opposition to these rules speaks volumes as to the economic damage that would be done. But the bias of the Obama administration is unmistakable. The costs of regulation are largely ignored, while the potential benefits are grossly overstated. As a result, it's up to the courts or Congress or the people to stop the Obama regulatory onslaught.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

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