- - Wednesday, March 4, 2015


American households are suffering from a little-reported part of President Obama’s agenda: skyrocketing electricity costs.

Supply and demand explains it: Under Mr. Obama’s plan, the country will lose 9 percent of its ability to generate electricity by 2030, yet the U.S. expects to add 54 million people by then — one-sixth more than it has today.

Although the biggest impacts are lurking around the corner, everyday people already are paying record high bills because of regulations and federal policies. Yet this impact gets scant media attention even as family budgets suffer.

Average U.S. electric rates last year were a record high 13.7 cents per kilowatt hour, as reported by the Bureau of Labor Statistics. In January, average rates were up again to 13.8 cents. By comparison, the 2008 pre-Obama annual average was 12.3 cents.

An average household uses 12,000 kilowatt-hours per year, meaning that each penny added to the kWh price will typically cost a family $120 annually (and significantly more for many homes). So what about the yet-to-hit biggest increases?

Unusually, Mr. Obama had no hidden agenda when it comes to electric bills. He made his intent public in 2008 when he told the San Francisco Chronicle, “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket. Coal-powered plants, you know, natural gas, you name it would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”

But the Democratic majorities in Congress failed to pass Mr. Obama’s cap-and-trade legislation in his first term, so he has made up for it with other onerous regulations. He picked a bad promise to actually keep.

The president’s Clean Power Plan restricts carbon dioxide emissions and will shut down a fifth of the nation’s coal-fired plants and almost 5 percent of total electric generating capacity by 2020. The impact report by the Environmental Protection Agency contains lots of fine print, which it omits from its press releases, such as:

“Average retail electricity prices are projected to increase in the contiguous U.S. by 5.9 percent to 6.5 percent in 2020.” That is a one-year jump more than twice 2014’s record increases. Many estimates say the hikes will be far worse than the EPA claims.

What’s known as Option 1 “will result in an 11 percent reduction in total generation.” In other words, production of electricity would drop by 11 percent because of EPA edicts, making it scarcer and costlier.

“The coal-fired fleet in 2030 generates between 25 percent and 27 percent less” power. This is because one-fifth of coal-powered generating plants will be forced to close. At that time, reports the EPA, expect electricity rates to climb 24 percent — which certainly qualifies as “skyrocketing.”

The EPA report includes a chart showing that, by 2030, America’s ability to produce electricity will drop 9 percent, from a baseline of 1,095 gigawatts without the new regulations to only 994 gigawatts with the regulations. Yet the U.S. population is expected to increase by 54 million people by 2030 to 373 million, according to the Census Bureau.

“More people, less energy” is not a formula for growth and prosperity.

The kicker is that the carbon dioxide restrictions are only one of multiple major energy regulations about to be implemented by the EPA. Others are in the works, including stricter emission restrictions on ozone, mercury vapors and more. And the costs are yet to hit from EPA’s brand-new limits on coal ash.

All these costly rules will find their way to the bottom line of your utility bill. Water bills will also reflect other EPA power grabs and decrees. And don’t forget home appliances, from lamps to refrigerators and air conditioners, dishwashers and clothes washers to toasters, which will all cost more under restrictions underway from Mr. Obama’s Department of Energy.

In the most audacious touch of all, the president actually claims he is saving us all money. He relies on a greenie group, the National Resources Defense Council, which claims we’ll spend $37 billion less on electricity by 2020. That’s a sneaky way to describe the study, which agrees that costs per kilowatt hour will soar. But the NRDC expects consumers to adjust by using less power, thereby lowering their bills. Paying a little less because you use a lot less.

Higher electricity costs mean lots of things, all bad. Lower standards of living. Fewer labor-saving appliances. More doing things by hand. Going to bed when it gets dark. It’s a reversal of the modern era ushered in when Thomas Edison invented a practical light bulb.

Supposedly, we’re told that we can save by spending, namely by buying more expensive high-efficiency appliances. It takes a ton of upfront spending to buy those products.

One website notes that few average consumers can afford to pay the prices commanded for “high-efficiency” items — $3,400 for a room air conditioner, $1,400 for a furnace, $550 for a dishwasher, $750 for a clothes washer, $1,200 for a water heater, $1,100 for a refrigerator and $550 for a clothes dryer, plus installation charges — just to save a couple of hundred dollars a year on the electric bill.

And read the fine print about the $10 light bulbs that supposedly last 10 years. Those projections are usually based on using them no more than three hours a day. And good luck finding your receipt when that expensive bulb burns out years early.

Perhaps you can search for those receipts by the light of Mr. Obama’s skyrockets.

Ernest Istook is a former Republican congressman from Oklahoma and president of Americans for Less Regulation. Get his free email newsletter by signing up at eepurl.com/JPojD.



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