Associated Industries of Missouri joins in filing amicus brief against EPA’s carbon regulations

On Tuesday, Associated Industries of Missouri joined 166 other state and local associations from 40 different states in an amicus brief filed in the U.S. Court of Appeals in the D.C. circuit.

The brief explains the devastating impact posed by the EPA’s carbon regulations in it “Clean Power Program”. The lawsuit, which is expected to be considered by a federal appeals court this summer is expected to be a landmark case that could shape Missouri’s energy and economic future.

The coalition’s brief outlines major legal and economic concerns with the rule, arguing that EPA has trampled on the rights of states to determine their own energy mix and implement environmental standards in a manner tailed to their own circumstances.

The “Clean Power Progam” threatens to cause serious harm to the U.S economy, raising energy prices and costing jobs. EPA’s own estimates project that its rule will cause nationwide electricity price increases averaging between 6 and 7 percent in 2020, and up to 12 percent in some locations. EPA estimates annual compliance costs between $5.4 and $7.4 billion in 2020, rising up to $11.9 billion in 2030 – which will be paid by all electricity consumers through rates. These are power sector compliance costs only, and do not capture the subsequent adverse spillover impacts of  higher electricity rates on overall economic activity.

Independent analyses show that the impacts on energy prices could be substantially higher. An analysis by NERA Economic Consulting indicated that average U.S. electricity prices would increase by 12% per year and the total costs of the rule could be between $366 billion to $479 billion over a 15 year time frame industrial energy consumers who will not only pay more for energy but also could be forced to purchase new equipment.

Further, higher energy prices disproportionately harm low-income and middle-income families. Since 2001, energy costs for middle-income and lower-income families have increased by 27 percent, while their incomes have declined by 22 percent. EPA’s rule will only exacerbate this trend. And higher costs for manufacturers and service providers will translate into higher costs for goods and services, leading to inflation.

In Missouri, EPA is requiring the state to reduce its electricity sector carbon emissions rate 36.7 percent by 2030. NERA has projected that this will increase state electricity prices by an average 21 percent in most years, and 29 percent in peak years. Currently, electricity rates in Missouri are less than 8.96 cents per kilowatt hour, about 11.5 percent below the national average.

“AIM has dubbed the CPP the ‘Clean Out Your Wallet Power Plan’ because of the large costs to individual consumers and business and industrial consumers in Missouri,” said AIM president Ray McCarty. “The ill conceived plan is incompatible with numerous practical and technical aspects of America’s electricity system and would represent a vast expansion of the EPA’s regulatory reach into authority held by states and other federal regulatory agencies.”

“Associated Industries of Missouri strongly urges EPA to withdraw this rule, perform more detailed analyses about the impacts of this rule on energy markets and ultimately pursue more balanced and reasonable policies,” said McCarty.