Georgia Power, that state's largest power company, announced this week that it is asking state regulators for permission to shut down 15 electrical generating units -- the closure of four power plants in all. The utility company says new regulations from the Environmental Protection Agency -- known as the Utility MACT rule -- will simply make the plants too expensive to run.
The regulations in question are intended to reduce the amount of mercury released into the air. But in fact, they have every appearance of being a back-door attempt to regulate carbon emissions -- precisely the kind of scheme that then-Sen. Barack Obama had in mind when he acknowledged in 2008 that "electricity rates would necessarily skyrocket" under his energy plan.
The 15 units that Georgia Power wants to shutter -- all but two of which are fired by coal or oil -- have a combined capacity of 2,061 megawatts, or enough to provide power for roughly 1.5 million homes. The company plans to close 11 of them on April 16, 2015, the exact day the EPA's new mercury regulations are scheduled to take effect. Georgia Power will seek waivers from the EPA to keep four of the others open for an extra year, and then it will shut those down on April 16, 2016. It is unclear how Georgia's energy sector will make up the 2 gigawatts of capacity it is losing.
The EPA has claimed that its new mercury regulation will produce $140 billion in annual economic benefits. Apparently, those benefits will not be going to the 480 power plant workers in Georgia who now stand to lose their jobs. Then there are the millions of Georgia energy consumers who will soon see higher rates and higher bills. More broadly, the National Association of Manufacturers estimates that this single rule will kill 1.65 million jobs nationwide through 2020 -- in the utility sector as well as in other industries -- especially manufacturing industries -- which will now have to pay more to carry out their energy-intensive tasks.
Even taken at face value, the EPA's claims of economic benefits are highly doubtful. In fact, the reductions to mercury are expected to produce only a tiny sliver of that $140 billion benefit -- just $6 million of it, in fact. But it will cost so much money to comply with these rules and produce this miniscule benefit that many plants will simply be closed instead. According to Dr. Anne Smith, senior vice president of NERA Economic Consulting's Global Environment Group, all of the EPA's estimated benefits from the Utility MACT rule come from "coincidental reductions" of fine particulate matter, which is regulated by a totally separate section of the Clean Air Act. Diehard environmentalists will be pleased that the closures will cause other pollutants to disappear, but the general public will be deprived of the electricity that those plants produce.
Obama also said in 2008 that "if somebody wants to build a coal-powered plant, they can. It's just that it'll bankrupt them." He seems to be making this come true, even without the carbon cap-and-trade system he once envisioned.