EPA’s New Emissions Regulations Follow the Electricity Market

September 23rd, 2013

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There has been a lot of overheated political rhetoric from the right and the left about the EPA’s emissions standards for new power plants. If you strip that away, however, you’ll find that the new rule is really codifying what’s already happening in the utility sector. Thanks in part to the lower emissions and lower cost of natural gas, this is already benefiting public health, the environment, and the economy.

The bottom line is that for all of the build-up about the new standards, energy sector insiders know that low natural gas prices, the growth of renewables, and little demand growth are already reshaping electric generation. As an AEP spokeswoman acknowledged on September 20 in National Journal, “We have no current plans to build any new coal-fueled power plants both because we don’t need additional generation, and it would be difficult to make an economic case for coal with today’s low natural-gas prices.” The new regulations marry these market trends with intensive stakeholder input from the private sector. The result is a clear roadmap for new electricity generation in the United States.

While administrative actions never carry the democratic appeal of a Congressionally mandated solution, Congress has been unable to agree on a path forward. The Supreme Court required the EPA act, and the regulatory revamping was inevitable.

It would be great if Congress could develop and pass bipartisan legislation to accomplish the same goals as the EPA. That’s extremely unlikely in the current political environment.  There’s a lot Congress could do—that’s bipartisan and does not cost much if anything—to create new opportunities in coal states and to ensure we maintain fuel diversity in our electricity fleet. This includes helping the private sector accelerating the development of carbon capture and storage technologies and removing the regulatory uncertainty that surrounds it.

Remember, even the EPA’s new source regulatory decision had to be court-ordered. The regulatory uncertainty for utilities has been a killer, most will tell you, and the business climate has suffered. This is a step forward, both for the environment and the business climate. It had to happen, and it finally did.

This piece was originally published via National Journal.