EPA’s Climate Change Plan Could Save States Money On Energy Bills

CREDIT: shutterstock

States could end up saving money on their energy bills under the Obama Administration’s proposal to reduce greenhouse gas emissions from power plants, according to a new report.

The report, published Thursday by energy research firm Synapse Energy Economics, looked at a future scenario in which states comply with the Environmental Protection Agency’s proposed Clean Power Plan, which aims to reduce emissions from power plants 25 percent from 2005 levels by 2025 and 30 percent by 2030. In the scenario, states meet or exceed their targets for the Clean Power Plan, and the U.S. as a whole ends up exceeding the goals of the regulation — achieving 58 percent reduction in emissions compared to 2005 levels by 2030. The report’s authors say they modeled the scenario in this way because they wanted to look at the “intent” of the Clean Power Plan instead of the proposed goals, which could change once the rule is finalized.

“Our Clean Energy Future scenario represents a substantial shift towards renewable generation as the costs of these technologies continue to decline and incentives are put in place to encourage adoption,” the authors write.

The report compares this scenario to a reference scenario, in which no new renewable energy or efficiency policies are adopted in states. It found that, in the Clean Energy Future scenario, energy bills in 2030 would be $35 per month lower than in the reference scenario. That’s $14 per month cheaper than household energy bills were in 2012. The Hill points out that this finding also portends higher savings than the $8 per month in savings that the EPA predicts will come from the climate rule.


CREDIT: Synapse Energy Economics

The report’s findings contradict claims from lawmakers that the EPA’s climate plan, which is set to be finalized next month, will raise electricity rates. Presidential candidate Mike Huckabee, for instance, has said that the rule would “bankrupt families.” And a House bill called the Ratepayer Protection Act would allow governors to refuse to comply with the reductions outlined in the plan if the regulation would have a “significant adverse effect” on electric bills or grid reliability. The bill passed the House in June, but hasn’t made it through the Senate.

Other reports have also pointed to the benefits that the country could see under the clean power plan. One study from earlier this year found that the proposed regulation will add more than a quarter of a million jobs to the U.S. economy by 2040. According to the report, the employment gains likely to be seen under the plan are equal to “roughly one month of healthy job gains.”

“Improvements in energy efficiency associated with the Clean Power Plan will reduce demand for electricity and, by extension, reduce electricity costs for households and businesses,” that report states.

The benefits aren’t only economic either. A May study published in the journal Nature Climate Change found that the carbon rule could prevent 3,500 premature deaths each year, in addition to 1,000 hospitalizations and about 220 heart attacks. Those prevented deaths and hospitalizations will be the result of the lower levels of particulates, sulfur dioxide, and nitrogen oxides that will result as carbon dioxide emissions from power plants are curbed. The study also found that some of the states that will benefit most from the rule in terms of health are states that are among the most opposed to the rule. That’s because many of the states that stand to gain the most health-related benefits from the Clean Power Plan rely fairly heavily on coal for their energy, so the rule would likely have a major impact on their air quality.