House GOP demands more EPA answers on utility air rule

Republican members of the U.S. House Energy and Commerce Committee said June 8 that they are once again asking the Obama Administration to provide a complete estimate of the cost of the utility Maximum Achievable Control Technology (MACT) rule announced last December.

GOP committee members wrote to U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson to follow up on previous committee requests. This is the fourth letter the committee has sent this year requesting a “full and transparent accounting” of the rule, the GOP members said in a June 8 statement. The Utility MACT rule is also known as the Mercury and Air Toxics Standards (MATS).

The committee recently received a partial response from EPA providing an estimate of $35bn for the capital component of the total cost, but the agency has still not provided total compliance costs or the “sticker price” for the rule, including present value of both capital and non-capital costs, the GOP member said. They want a complete estimate from EPA given the rule’s effects on consumers, energy prices, and the overall economy.

The letter to Jackson cites the results of PJM’s recent auction showing an increase in electricity prices. The members wrote, “Our concerns about the total cost of the rule are based on the significant electricity price increases that may be triggered in certain regions of the country by this and other recent or pending EPA power sector rules. As you may be aware, the 13-state PJM Interconnection Region recently announced that capacity prices for 2015-2016, the first year that electricity generators will be required to comply with the Utility MACT rule, will be 8 times higher than the price that was set for 2012-2013. As explained by PJM, the ‘auction was impacted by an unprecedented amount of planned generation retirements (more than 14,000 MW) driven largely by environmental regulations, which drove prices higher than last year’s auction.’” 

Independent analysts estimate that EPA’s Utility MACT rule is the most expensive regulation the EPA has ever issued for power plants, and the committee’s own analysis of the rule suggest its costs could total over $100bn.

“As set forth in the attached information requests, based on the estimates and assumptions published by EPA, it appears the total cost for the Utility MACT rule may exceed $108 billion,” said the letter. “We specifically seek EPA’s response concerning whether this reflects a reasonable estimate of the total present value cost of this regulation rule, based on EPA analysis and assumptions. We have continuing concerns about such an unprecedented, expensive rule with such far-reaching impacts across many states.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.