NMA Says EPA’s Climate Rule Erects Structural Barrier to Economic Recovery, Future Growth

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Date: Tuesday, 29 July 2014 13:39

Last Updated on Tuesday, 29 July 2014 13:39

National Mining Association (NMA) President and CEO Hal Quinn testified this morning at the Environmental Protection Agency’s (EPA) public hearing in Washington, D.C. highlighting the flaws that undermine the agency’s proposed regulation for reducing greenhouse gases from existing power plants. In the following statement, Quinn summarizes why “this stunning attempt to remake the nation’s entire electric grid” will weaken the nation’s manufacturing base and grid reliability, burden households with high energy costs and deprive states of the flexibility to manage their energy economies:

“EPA’s proposal is another step in this administration’s policies designed to eliminate low cost and reliable electricity and replace it with more expensive and less reliable sources. By reducing the diversity of our nation’s electricity supply and raising its costs, EPA will create a structural barrier for our economic recovery and future growth.

“Entirely missing in action from this proposal is recognition of the value of generation diversity to the stability of power supplies and prices. Coal-based power plants were vitally important this past winter, supplying 92 percent of the incremental demand for power. When many of these plants are no longer available in harsh winters to come, the nation will literally pay the price for EPA’s flawed rule.

“Higher electricity and gas prices will make U.S. manufacturing less competitive and deprive families of disposable income as they spend more to light, heat and cool their homes. In those regions where coal generation serves as the primary source of electricity, retail electricity rates are 30-50 percent lower than the regions where coal generation is a lower share of electricity.

“EPA’s proposal rests on a weak foundation. Among the rule’s assumptions – or ‘building blocks’ – are unrealistic efficiency gains anticipated from coal-based power plants. Prior EPA rules have made these plants less efficient. The present proposal will force many coal plants to run at reduced or sub-optimal levels.

“The more substantial efficiency gains possible in the coal fleet are taken off the table by EPA’s rule for new plants that requires technology that actually reduces plant efficiency by up to 25 percent. EPA’s assumption of a 1.5 percent growth in year-over-year energy efficiency gains nationwide illustrates the gap between wishes and reality as states with the lowest retail power prices will see the rising cost of the next increment of energy efficiency.

“Similarly unrealistic is EPA’s assumption that gas plants can run at a 70 percent capacity factor. There is no technical or economic evidence that they can sustain generation at this level. EPA’s goal for intermittent, renewable sources is not credible either. These sources are called ‘intermittent’ for a reason: their performance is highly variable daily and seasonally.

“EPA touts the flexibility it offers states. But as each of these ‘building blocks’ crumbles, the rule places states into a straightjacket forcing them to make increasingly painful and economically risky adjustments to meet target reductions.

“Many questions must still be answered about this rule and its implementation, but there is already one certainty: the costs and risks are real and substantial; the benefits are not.”

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