Study Shows EPA Regs Will be Costly

EPA-300The U.S. Environmental Protection Agency’s (EPA) proposed carbon rule is the latest in a series of regulations alongside rising natural gas prices that will increase the cost of electricity and natural gas by nearly $300 billion in 2020 compared with 2012, according to a study released last week by Energy Ventures Analysis, Inc. The study, “Energy Market Impacts of Recent Federal Regulations on the Electric Power Sector,” demonstrates the heavy financial burden the EPA’s collection of regulations will force on American families, businesses and manufacturers through soaring energy costs. The study found the typical household’s annual electricity and natural gas bills would increase by $680, or 35 percent, from 2012 compared to 2020, escalating each year thereafter as EPA regulations grow more stringent. The cost of electricity would increase the most in states that have implemented deregulation of wholesale electric power markets, where the price of electricity will rise to the marginal cost to support new generating capacity. The study identified a $177 billion increase in electricity costs and a $107 billion increase in natural gas costs in 2020 compared with 2012 when the cumulative effects of EPA regulations and energy market impacts are analyzed. Numbers specific to Colorado can be found below.

  • Average annual Colorado household electricity and gas bills would increase by more than $610 in 2020

This represents a 39% increase in average annual household power and gas bills, with average annual power bills increasing more than $250 and average home gas heating bills rising by over $350.

  • The total annual cost of power and gas will grow to over $11 billion in 2020

This represents a $4.4 billion annual cost increase for electricity and gas in the state. Annual power costs would increase by $2.8 billion and annual gas costs would increase by $1.6 billion.

  • Power sources will change dramatically

Natural gas generation is expected to increase by more than 130% in Colorado at the same time that EPA expects wholesale natural gas prices to more than double.

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