If you want to irritate promoters of the Clean Power Plan, just state the obvious: It’s going to increase electricity prices, and that will be bad for the poor and the middle class.
Last Monday, I made that very point during an interview on KPCC radio in Los Angeles, (“Air Talk with Larry Mantle”). My counterpart was David Doniger of the Natural Resources Defense Council (NRDC), a group that has pushed hard for the Clean Power Plan. After I pointed out that electricity prices in Europe had soared due to renewable-energy mandates, Doniger replied with something to the effect that I should not be using “scare stories” that are a “decade old.”
Doniger’s reply was hardly surprising. The claque that’s pushing the Clean Power Plan — the White House, the wind lobby, the solar lobby, NRDC, the Environmental Defense Fund, and the Sierra Club — don’t want to admit that it will probably increase costs for the poor and the middle class. On Monday, the White House even published an article on its website that declared, “The most cynical claim is that EPA’s plan will harm minority and low-income communities.”
To be clear, I’m a cynic about politics in general and the politics of green energy in particular. But in the Potemkin village of green-energy boosters, it’s now considered cynical to state the obvious. In the view of green boosters such as Doniger — who, by the way, worked on climate and air policy for seven years at the EPA — the European numbers don’t matter. They are merely “scare stories” that might stand in the way of ever-increasing government intervention in energy markets.
I agree with Doniger that the numbers from Europe are scary. Consider Germany, which has mandated huge increases in renewable energy. Between early 2007 and late 2014, residential electricity prices (for households that consumed between 2,500 and 5,000 kilowatt-hours per year) rose by more than 40 percent, going from $0.23 cents to $0.33 per kilowatt-hour. Those prices — which are readily available on Eurostat and include all taxes — jumped at the same time Germany’s solar capacity increased 17-fold and wind capacity more than doubled.
Eurostat data from Spain, which has also been on a renewable-energy binge, tells a similar story. Between 2007 and 2014, residential electric rates in Spain jumped by 70 percent. Over that same time period, wind capacity increased by about 50 percent and solar capacity grew about seven-fold. Spanish households are now paying some of the highest electricity prices in Europe, about $0.27 per kilowatt-hour, a rate that is more than twice the U.S. average.
Many others are underscoring the danger of foisting more-expensive electricity on the poor, including Charles Steele Jr., the president and CEO of the Southern Christian Leadership Conference, the civil-rights group that was co-founded by Martin Luther King Jr. On July 30, Steele published an article in the State Journal-Register (Springfield, Ill.) in which he observed that “the EPA has a history of downplaying, or ignoring, the cost of its regulations.” He went on, saying that “environmental goals always seems to come with ever-increasing price tags often disproportionately borne by the less fortunate.”
Steele cited a report by the consulting firm Energy Venture Analysis, which found that “the Clean Power Plan would drive up wholesale electricity costs in Illinois by nearly 20 percent.” He concluded that “trading marginal environmental gains for soaring energy prices is a bad deal.”
Jo Ann Williams, the head of the National Rural Electric Cooperative Association, made some of the same points that Steele made. In a statement released on Monday, she said the Clean Power Plan “exceeds the EPA’s legal authority under the Clean Air Act, and it will raise electricity rates for our country’s most vulnerable populations while challenging the reliability of the grid.”
The Clean Power Plan will ‘lead to lost jobs, lower incomes, and higher poverty rates for the 128 million blacks and Hispanics living in America.’
In June, Harry C. Alford, the head of the National Black Chamber of Commerce (NBCC), said that the Clean Power Plan will “lead to lost jobs, lower incomes, and higher poverty rates for the 128 million blacks and Hispanics living in America.” Alford has also called the measure “a slap in the face to poor and minority families.” A study funded by the NBCC has estimated that due to the Clean Power Plan, the poverty rate for blacks will increase from 26 percent to about 32 percent by 2025.
Of course, no one can predict exactly what will happen with the Clean Power Plan, how America’s sprawling electricity sector will respond, or what will happen with electricity prices. But for the White House to label valid criticism of the plan as “cynical,” well, that only reinforces my belief that the great comic Lily Tomlin had it right when she said, “No matter how cynical I get, I can’t keep up.”
— Robert Bryce is a senior fellow at the Manhattan Institute. His latest book is Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong.