What Congress Should Know About EPA’s Control Over Electric Power | Commentary

Posted October 15, 2014 at 9:02am

As the national debt looms over our anemic national economy and the geopolitical order teeters, the Environmental Protection Agency has proposed to dismember the country’s finely-tuned system of electric power.

Proposed last summer, EPA’s mandate to reduce carbon dioxide from existing power plants would impose low-carbon operation of the nation’s system of electric generation — now dependent on carbon-rich fossil fuels for almost 80 percent of electricity. By EPA’s own admission, the regulatory scheme means closure of at least 11.5 percent of the nation’s 1,023 gigawatts of electrical-generating capacity.

Congress several times considered, but always rejected, federal regulation of carbon dioxide. EPA, however, handily arrogated this authority in 2009 through a legal finding that carbon dioxide — a harmless trace gas in the atmosphere — is a pollutant under the Clean Air Act. After several light-handed rules to limit greenhouse gases, EPA now would hack away at a prodigious 20th century achievement: the nation’s system of electric power. EPA masks the scale of the proposed regulatory re-engineering by dubbing the rule the “Clean Power Plan.”

The magnitude of EPA’s mandatory plan has escaped most analysts. Coverage typically focuses on how the rule would kill coal and increase electric rates. Though accurate, such analyses overlook the breadth of federal power asserted in what EPA characterizes as a flexible, common-sense program to reduce carbon dioxide emissions from power plants by 30 percent. EPA imposes the mandate through widely varying numerical standards assigned to each state.

Yet, these numbers conceal the extent to which the “Clean Power Plan” exceeds the long-understood limits of EPA authority under the CAA. EPA now claims regulatory jurisdiction over the entire system of electric power — an economic purview without a limiting legal principle.

By reinterpreting the single word “system” in a brief section of the law, EPA vaults from prescribing “the best [technological] system of emission reduction” on power plants to prescribing “the best system of electric generation” across the nation. According to EPA, the best system of electric generation is low- to zero-carbon content. With a slight turn of phrase, EPA lays claim to controlling the means of production of electricity in this country.

And don’t miss the distinctive fangs of the CAA. Unlike other policy mechanisms to reduce carbon dioxide such as emission trading schemes, carbon taxes, or portfolio standards, EPA’s dictates under the CAA must be highly enforceable, requiring verifiable and quantifiable means of proving compliance. EPA’s so-called flexible program envisions compliance at the nerve center of electric power: dispatch of electric current on the grid. Thus understood, EPA’s plan would set aside foundational protocols for dispatching electricity based on cost and grid safety to require priority to electric generation with the least carbon content.

Forcing low-carbon dispatch would set the U.S. on a path already creating economic havoc in Germany and energy rationing in the U.K. scrambling to meet a goal of 20 percent generation from renewables by 2020, Germany’s subsidies amount to $31 billion in 2014 and are projected to reach over $800 billion by 2022. In the last five years, German industrial exports declined $67 billion.

And with retail electric prices now three times higher than the U.S. average price, hundreds of thousands of households can no longer afford electricity and revert to the pre-industrial favorite — wood.

Irony of green irony, wood-based fuels are now making a comeback in Europe. According to the Economist, 50 percent of claimed renewable generation in Europe now derives from wood-based fuels. And the clincher is that Germany is using more coal-fired generation than when it began its bold energy transition.

Similar miscalculations have led to an energy-rationing program in the U.K. to provide enough electricity to warm homes this winter. The hard-line greens among UK officialdom speak about “the outdated paradigm of economic growth.”

Germany and the U.K. made their national vows of carbon chastity in new laws. The EPA’s Clean Power Plan, however, would impose a similar scheme without a jot of congressional approval.

Although EPA’s seizure of the electric power sector seems a likely candidate for our Supreme Court’s undoing, don’t bet on it. Judicial restraint of the EPA has been rare and mild for the last four decades. If our democracy and market economy are to survive, Congress must establish clear limits to EPA’s reach, so that the courts can meaningfully restrain an agency that now knows no bounds.

Kathleen Hartnett White is the director for the Armstrong Center for Energy and Environment at the Texas Public Policy Foundation and a former chairman of the Texas Commission on Environmental Quality.