Chamber says EPA Clean Power Plan makes poor assumptions on renewable energy

A new analysis by the U.S. Chamber of Commerce’s Institute for 21st Century Energy identifies key shortcomings that illustrate the subjectivity and “fundamental unfairness” of the Environmental Protection Agency’s (EPA) Clean Power Plan.

“What’s in a Target?” examines how the EPA relied on faulty assumptions and mistakes as the basis for the complex regulatory formulas used to set requirements on states under the Clean Power Plan (CPP), the Chamber said in a Jan. 19 news release.

The U.S. Chamber of Commerce has been a vocal critic of the EPA CO2 reduction plan and is part of legal challenges to the rule.

“EPA’s power plant regulations are flawed at their very core,” said Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy. “Our analysis reveals how the EPA relied on tactics buried deep in the rule’s complex regulatory formulas to make the rule at least 28% more stringent, which will increase compliance costs on states, utilities, and consumers, by billions of dollars.”

For instance, the rule’s stringency relies heavily on the EPA’s decision to use 2012 as the basis for its assumptions on deployment of wind energy, demonstrating the EPA’s “deceptiveness,” according to the Chamber Institute.

In 2012, the pending expiration of the production tax credit (PTC) triggered a massive spike in new wind installations. Despite the fact that no government forecast expects the unusual, record-smashing circumstances of 2012 to come close to being repeated, the CPP assumes that it will in fact reoccur every year for seven straight years, the Chamber said.

“To be clear, these criticisms are aimed squarely at EPA’s regulatory design and underlying assumptions, and not at renewable energy or its potential. The U.S. Chamber is a steadfast supporter of continued efforts to advance renewable technologies to drive down costs and achieve parity with traditional electricity sources,” the Chamber said in its analysis.

“But the advancements that we aspire to someday realize should not be relied upon as the basis for sweeping regulations,” the Chamber said in its analysis.

The final rule bases state requirements on an assumption that renewables can grow a whopping 61% more than they were projected to increase in the Proposed Rule, and nearly 250% above 2012 generation levels. As a result, EPA’s revised renewable energy projections form the basis of more than half of all carbon reductions mandated by entire CPP, the Chamber said.

The Chamber’s energy institute also says that the design and justification issues in the final rule “bear little resemblance” to the proposed rule. This gave stakeholders no real opportunity to review and comment on the details, the chamber said.

The report takes aim at the specific CO2 reduction goals that EPA has targeted for individual states. “Welcome to the world of EPA Fuzzy Math, where up is down and down is up. Where do these goals come from, and how did EPA pull this off? Well, it’s complicated. But it’s based on layer upon layer of shaky assumptions, outright errors, and uneven treatment of states that we hope to explain in this analysis,” the Chamber said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.