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Wednesday, January 23 , 2019, 4:53 am | Fair 39º


Tom Donohue: Bringing the EPA Back to Reality

Utility MACT regulation could strain our power supply and put the economy and jobs at further risk

Is it just me, or does it seem like Environmental Protection Agency regulators are writing new rules in an alternate reality? Maybe it’s a gravity-free zone in which the burden of a growing federal bureaucracy doesn’t weigh down the economy, or where the uncertainty of overregulation isn’t a drag on job creation.

Take the Utility Maximum Achievable Control Technology (MACT) rule requiring utility companies to undertake expensive retrofitting or plant rebuilding to control emissions. One of the EPA’s costliest rules ever, it could strain our power supply and cast a dark shadow over our economy and job creation at a time we can ill-afford it.

Utility MACT would carry heavy compliance costs. Facing the expenses of replacing power plants, installing compliance equipment, and building new natural gas lines and transmission lines, utility companies may be forced to freeze hiring or layoff existing workers.

Many plants would temporarily shut down for retrofits. If utility companies aren’t producing power, then utility workers aren’t getting paid. Worse still, others may halt operations altogether. Ahead of the rule being issued, dozens of coal-fired plants signaled they may have no choice but to retire because compliance would be too complicated or costly.

And most utilities would be forced to make the expensive upgrades in an unrealistically short time frame, straining the power grid and threatening the reliability of power in America. Electricity distributors have warned that they may have to ration power to large industrial consumers as utilities work to comply with the rules. Clearly, the EPA hasn’t fully considered how rushed implementation would affect our electricity supply — not to mention the economic impact when the lights go out on businesses large and small.

So what’s the gain for all this pain? A Wall Street Journal editorial points out that the Utility MACT rule would result in $6.1 million in savings through mercury reductions. But the rule would cost $11 billion annually — and that doesn’t factor in the indirect costs of slowed economic growth and stifled job creation.

Continued pursuit of sweeping regulations at the expense of our economy signals a stubborn detachment from reality. The EPA’s recent ozone rules were so over the top, and the costs and benefits were so out of balance that President Barack Obama had to intervene and tell the agency to slow down. Was that not a reality check?

We’re all for a clean and reliable power supply, but the transition must be cost-effective and executed within a feasible time frame. President Obama should bring the EPA back to reality again, starting by granting power plants more time to comply with Utility MACT.

— Tom Donohue is president and CEO of the U.S. Chamber of Commerce.

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