On June 2, 2014, the Environmental Protection Agency issued proposed rules to reduce carbon dioxide output from current operating fossil-fueled power plants. These rules are thought to encourage use of cap-and-trade programs in individual states to force reductions in carbon dioxide output. Ten states currently have cap-and-trade programs–nine states in the North East and Mid Atlantic Regional Greenhouse Gas Initiative (RGGI) and California. RGGI started January 1, 2009. Cap-and-trade went into effect in California January 1, 2013.
The following table lists residential and all sector electricity rates for these ten states plus the national average and Georgia for March 2014.
Table 1
RESIDENTIAL AND ALL SECTOR ELECTRICITY RATES
(cents/kilowatt-hour)
State Residential Rate All Sector Rates
Connecticut 19.51 16.03
Maine 15.22 14.01
Massachusetts 17.33 15.83
New Hampshire 17.33 15.85
Vermont 17.36 14.83
New York 20.87 17.11
Delaware 12.20 11.23
Maryland 13.57 12.55
California 15.94 13.80
United States 12.26 10.32
Georgia 11.32 9.22
Source: U.S. EIA
In order to reduce carbon dioxide emissions, states must replace fossil-fuel generated electricity with electricity produced by renewable energy sources solar, wind, biomass, and geothermal or nuclear or hydroelectric power. The ten states with cap-and-trade have mandates for renewable energy generation called renewable portfolio standards (RPS).
Thirty three states have RPS with Hawaii the highest RPS of 40 percent renewables by 2030. California has the second highest RPS with a requirement of 33 percent by 2020. Nineteen states have all sector electricity rates above the national average and all have RPS. With exceptions of Hawaii, whose majority of electricity is generated with oil, and Alaska; the ten states with cap-and-trade have the highest electricity rates in the nation. The March 2014 average cost of all sector electricity for the ten states with cap-and-trade is 14.84 cents per Kilowatt-hour (Kw-hr.)– 44 percent higher than average of 10.32 cents per Kw-hr. for the nation
The majority of renewable energy generated in the U. S. is biomass which consists of biofuels (ethanol from corn and biodiesel from soy beans, etc.) and energy sources that generates heat such as wood, waste, and land-fill gases. Media-popular renewable energy sources of wind accounts for less than one-third of renewable energy and solar energy less than ten percent of wind. Nevertheless, RPS is being met with wind and solar.
Table 2 summarizes all sector electricity costs and percent wind and solar renewable energy for RGGI, California, the U. S., and Georgia. The comparison years are March 2008 and March 2014 for electricity costs. For percent wind and solar energy, the comparison year had to be increased to 2011 because U. S. EIA did not tabulate these electricity sources for states because they were so small. For March 2008, the average all sector cost of electricity for the ten states with present day cap-and-trade is 13.36 cents per Kw-hr. This is 47 percent higher than the U. S. average of 9.09 cents per Kw-hr.
Table 2
Electricity Costs and Renewable Energy Use
States Electricity Cost Percent Renewables
(cents/kw-hr) (Wind and Solar)
Mar. 2008 Mar. 2014 Mar. 2011 Mar. 2014
RGGI 14.53 15.00 1.7 2.8
California 11.83 13.22 4.6 13.3
United States 9.09 10.32 3.3 5.8
Georgia 7.35 9.22 0 0.01
Some may question why Georgia is listed in Tables 1 and 2. Georgia is a state with no fossil fuel resources that has to transport natural gas from Louisiana and Texas and coal from Wyoming and still has electricity rates 10 percent below the national average for March 2014. For March 2008, Georgia had electricity rates 24 percent lower than the national average because of its greater use of inexpensive coal. In addition, For March 2014, Georgia’s all sector electricity rate is 61 percent below the average of the ten states with cap-and-trade. Georgia does not have a RPS. This is a clear example of states without RPS having lower electricity rates than states with RPS and present day cap-and-trade.
On May 28, 2014, Ohio’s legislature passed a bill freezing its renewable portfolio standard of 25 percent renewable energy by 2025 for two years to study its effects upon rates. This may be the start of a process by other states to disassemble rules passed years ago in yielding to passions of glorious clean energy.
The carbon dioxide reductions mandated by EPA for current electric power plants will force shut down of coal plants and replacement of electricity with natural gas, wind, and solar. This in a sense means states without RPS are forced to adopt such programs along with cap-and-trade. Another factor not discussed is the additional burden placed on Southern states due to Southern migration of the country’s population. Higher electricity prices in Midwest states with high reliance on coal will find the business climates less attractive.
Abundant, reliable, and inexpensive electricity is a major player in a healthy, prosperous society. The new regulations proposed by EPA most certainly will cause increased electricity rates and reduced lifestyle for many U. S. citizens. This all being caused by EPA’s perception carbon dioxide from burning fossil fuels is a source of pollution causing global warming.
Associated Press columnist Josh Lederman wrote in a column “Obama ties public health, carbon rules” President Obama created theater in his May 30 weekly address by appearing in the Children’ National Medical Center surrounded by medical equipment and white lab coats to claim carbon dioxide causes health problems for children like asthma. This is an outrageous attempt to fool the nation into abandoning fossil fuels that has provided great wealth and comfort to this nation.
Carbon dioxide is a necessary chemical to sustain life on this planet. It is an airborne fertilizer that increases plant yields and bigger plant root systems that make them more drought resistant. A report on social benefits of carbon dioxide for agriculture alone is estimated at $3.2 trillion from 1960 to 2012. Benefits from 2012 to 2050 are estimated to be $7.9 trillion. It may be the increase in atmospheric carbon dioxide from 310 parts per million (ppm) in 1950 to 400 ppm today is the reason the planet can feed the population increase of 2.5 billion in 1950 to 7 billion in 2013.
Abundant fossil fuel energy is the source of benefits to modern society. The energy sources cause risks; but society deems those risks well worth accepting in light of benefits. Take the example of automobiles. In the United States 33,000 die annually from automobile accidents; yet the 90 deaths daily are essentially ignored. We have 230 million passenger cars and light trucks. On average they travel 12,000 miles per year. This leads to an auto fatality every 84 million miles traveled. The convenience of auto travel overrides this slight risk of a fatality.
Higher electricity prices cause the less fortunate to forgo health benefits of heating in the winter and air conditioning in the summer. This leads to unnecessary illnesses and deaths. Can EPA prove benefits of decreased carbon dioxide output in electricity generation, which causes price escalation, overrides risks of reduced electricity availability.
It is relatively simple to show 33,000 death certificates annually due to automobile accidents. Can EPA produce one death certificate they claim is due to carbon dioxide pollution? Can one death certificate be produced saying a child died from asthma due to carbon dioxide? I think not. In the future we may be able to show death certificates due to EPA’s and President Obama’s actions.
James H. Rust, Professor of nuclear engineering and policy advisor The Heartland Institute
Professor of Nuclear Engineering, Georgia Institute of Technology (ret.), Climate Change and Energy
