Clean Power Plan halted: What this means for you

Experts

Policy Counsel, Energy and Environment
Senior Communications Associate, Energy Policy

By Jason Kuruvilla on Tuesday, March 28th, 2017

Withdrawing the Clean Power Plan is a mistake that will increase costs for consumers through higher energy and health care bills. The Clean Power Plan requires states to reduce carbon pollution from power plants and encourages investments in energy efficiency and low-cost renewable energy. It is important to note that renewable energy is the fastest growing domestic energy source in the United States.

The Clean Power Plan also provides funding and incentive programs targeting low-income households.  If these programs are cut, combined with the administration’s proposed budget cuts to weatherization, bill assistance, and other efficiency programs, low-income households will be especially hard hit.  

Meeting the goals of the Clean Power Plan would save the average U.S. household $160 a year on their energy bills by 2030, according to a study from Georgia Tech. Overall consumer savings would total $250 billion in the 15 years that follow full implementation of the Plan, equal to $1,800 per household.

But one of the provisions of today’s executive order may prohibit the government from measuring the societal cost of carbon emissions, which helps quantify impacts on consumers, particularly for low-income and other vulnerable populations. This cost takes into account damages from climate change, including higher food prices, property damage, higher insurance premiums, and higher energy costs from excessive heat. When federal decisions ignore these costs to consumers, they shift the cost of pollution and climate change away from polluters and onto families and individuals.   

So you might ask: if renewable energy and energy efficiency are so cost-effective, then why do we need the Clean Power Plan–why not let the market decide? Electric utilities do not operate in a free market. Most of them are monopolies. And unfortunately, many utilities in this country still make money from spending money, so if they build expensive power plants and get a high rate of return on the amount of money they spend, then they have a disincentive to invest in cheaper and cleaner options, such as energy efficiency, or solar arrays or wind farms.  

States that allow utilities to make consumers pay to overextend the life of aging fossil fuel infrastructure or build expensive new plants are looking backward and often waste ratepayer money.  The Clean Power Plan helps cut away this disincentive by setting targets that encourage investment in these cleaner and more cost-effective options.

The good news is that renewable energy and efficiency have been growing rapidly. Many countries, states and utility companies are already moving in the direction of cleaner energy. Last year, solar power increased by 50% globally, thanks to strong growth in China and the U.S. Costs for renewables are falling rapidly.

And a recent U.S. Department of Energy report found that wind and solar jobs increased by 32% and 25% respectively between 2015 and 2016. And the energy efficiency sector is projected grow 9% in 2017.  Rather than slowing down this progress, the federal government should be encouraging states to boost renewables and energy efficiency to help lower utility bills for consumers, reduce pollution, and expand economic growth.

Business and industry perspectives are important, but if they are the only voice being heard, then ordinary people can lose out.  We hope that the administration will reconsider its action in light of the public health benefits that would be lost and the costs that would be borne by consumers should the Clean Power Plan be cut back.  

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