Power Plant Regs Threaten Self-Inflicted Wound for Consumers (OPINION)

The economic landscape in Arkansas and across the nation has improved considerably in recent years. Our economic recovery, though still incomplete, appears to be gaining steam. But it wasn’t so long ago that the outlook was considerably less optimistic.

In hopes of sustaining our current positive trajectory, it is helpful to take stock of where we stand today, and to understand what’s helped us to bridge the gap from the economic doldrums of five years ago to today’s brighter outlook. And while a number of factors have clearly worked in concert to help deliver us to today’s steadier footing, no single dynamic has done more to stabilize our economy and spur the creation of new jobs than the growing access to affordable, reliable power.

Growing domestic supplies of fossil energy — both coal and natural gas — have helped to position local power generators well for the future. As our national reserves have become more abundant, steady pricing dynamics have helped us to ensure the steady, don’t-give-it-a-second-thought energy supply that our customers need in order to stay productive and efficient. And given the vastness of these energy supplies, we are in position to continue to provide this energy for a long time to come.

Whether it’s keeping the lights on in thousands of households here in Northwest Arkansas or keeping the lines moving at our manufacturing and production facilities, energy is on the front lines of our economic recovery.

As favorable as these dynamics are, though, the horizon is not without concerns. Policy shifts in Washington are on the verge of drastically undermining our ability to continue to reliably generate affordable energy for our customers.

The Environmental Protection Agency is in the process of proposing new greenhouse gas standards on both new and existing power plants in the United States. The rules would mandate aggressive emissions reductions through the installation of control technologies — such as carbon capture and sequestration — that aren’t yet commercially viable. This new regulation would put tremendous pressure on generators’ ability to produce power from the very energy sources — coal and natural gas — upon which they rely for the bulk of our baseload capacity.

Under the new regulatory regime, construction of new power plants would be effectively impossible, rendered financially unattractive to investors given the draconian emissions requirements that the EPA is in the process of finalizing. Existing power plants — the ones that are fueling our economy today — could find themselves facing no other option than shutdown or retirement in the face of GHG standards that they cannot hope to meet.

The EPA’s plan, in sum, threatens to reduce the amount of power that can be generated from fossil fuels like coal. And it doesn’t take an economist to understand what that means for consumers.

Reduced generation capacity means reduced supply, and that drives prices upward for consumers. From families to factories, those that must consider the price of energy in their budgets would feel the pinch under the new EPA rules.

Amid our strong but still tenuous economic recovery, these price impacts make it more difficult for us to stay competitive, to continue to lure jobs back to Arkansas and to stem the tide of companies seeking to locate elsewhere. This means fewer jobs, less growth and less opportunity.

But prices aren’t the only dynamic that stand to take a hit under the EPA’s new plan. Power generators’ ability to produce power reliably — to ensure that the lights come on when consumers flick the switch — will suffer if the EPA’s plan is implemented.

Nothing is more important to ensuring steady growth than reliable, affordable energy. Power producers know what it takes to complete this vital task, and their work is vital to keeping our economy on track.

But this process is made considerably more difficult when policy makers work against us rather than with us. The EPA’s plan to regulate GHG emissions from new and existing power plants is an example of our government failing to operate with our best interests in mind. 

State representative Dan Douglas (R-Bentonville) serves on the Joint Committee on Energy.