Center for Property Rights

The Grow⁠i⁠ng Cos⁠t⁠ of Keep⁠i⁠ng ⁠t⁠he L⁠i⁠gh⁠t⁠s On

By: The James Madison Institute / June 16, 2016

The James Madison Institute

Center for Property Rights

June 16, 2016

This opinion editorial originally ran in Florida Politics on June 16, 2016.

Much like vacations, road trips, and barbecues, summertime brings with it a seasonal spike in residential energy consumption. The Sunshine State is certainly no exception. We use plenty of power to cool our homes and charge the electronics in the hands of our children. No doubt, this very hot, energy-intensive season is a good time to consider how the rising costs of energy impact a family’s budget and how decisions by unelected bureaucrats in Washington exacerbate the financial burden of all Floridians.

A recent example of such a decision is the Clean Power Plan (CPP). The CPP is a mandate from theObamaadministration for electricity producing power plants to reduce CO2 emission by 30 percent by 2030. It is nothing more than the regulatory workaround to the Cap and Trade scheme, which failed to gain traction in Congress in 2010. In effect, it is a takeover of our nation’s electrical power grid via regulation, something that has always been regulated by the states.

Proposed in June 2014 and entered into the Federal Register Oct. 23, 2015, the plan included four strategies to reduce such emissions: lower the heat rates of emissions from existing coal-fired power plants by 6 percent; replace coal-fired plants with ones using natural gas; replace coal-fired plants with ones using alternative/renewable energy sources; and reduce electricity consumers can use through “energy efficiency measures” by 1.5 percent.

Implementation of the CPP would be devastating for consumers and our nation. The Environmental Protection Agency’s plans will force Florida and 46 other states to systematically limit the power plants that we rely on for our power and shift to other energy sources; ones that as yet remain as untested as they are unreliable. While the EPA’s estimates have repeatedly been shown to underestimate the cost of the Plan and exaggerate the benefits, anindependent studyhas found that Florida’s electricity prices face an 11 percent average annual electricity price increase with a peak year electricity price increase of 15 percent.

In anannual updateto the “Energy Cost Impacts on American Families,” study released earlier this month, the numbers indicate that indeed, Americans spend a significant amount of their incomes on energy. Data compiled from U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and the U.S. Energy Information Administration shows that 40 percent of American families (51 million households) take home an average of $1,643 each month and spend 17 percent of that on energy bills.

The news is even grimmer for the most vulnerable Americans. According to the study, the poorest 25 million families spend a whopping 22 percent on electricity and gas. The ability for American families to keep their lights on cannot and should not be weighed against cutting back on other essential necessities. However, for many families that stark choice is ever closer to becoming a reality.

This disturbing news clashes with the fact that the United States is blessed with some of the most abundant energy resources in the world. Our country is quickly becoming a major producer of oil and natural gas. Coal, long a staple in the national energy mix, has seen substantial investments totaling more upward of $122 billion by the end of the year to make its use cleaner. Since the 70s, coal has become 92 percent cleaner to use.

And yet, despite the good news, national average electricity prices have continued to creep up, eating more and more out of family budgets. Since 2005, they have climbed by 7 percent, and when adjusted for inflation, 33 percent. Even worse, these cost increases have largely come at a time of economic recovery, when American families could use all the good news they could find.

What drives these prices ever upward? Many factors can be attributed, but some of the blame can be placed on the shoulders of the politicians and bureaucrats in our nation’s Capital. Unelected officials at the EPA (EPA) have been incredibly busy churning out regulations that have cost the economy and individual consumers billions of dollars.

It comes as no small relief that a bipartisan coalition of Attorneys General, including Florida Attorney GeneralPam Bondi, has pushed back against Federal overreach by suing the EPA over the CPP, and have secured an unprecedented stay from the Supreme Court while working for a total overturn.

Lowering the cost of energy should be of utmost concern to policymakers both in Washington and Tallahassee. Reducing the percentage of income that every family uses to pay for energy will enhance the quality of life for millions of Americans and drive the economic growth our nation so acutely needs. While the efforts of Pam Bondi and other Attorneys General is a good first step, regulators must realize that while their schemes might be done with good intentions, there exists a human cost that cannot be ignored, especially when it affects the most vulnerable members of our society.

Dan Peterson is director of The James Madison InstituteCenter for Property Rights.