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Groundhog Days: Utilities Wrong Again About Pollution Safeguard Costs

Groundhog Days: Utilities Wrong Again About Pollution Safeguard Costs

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Despite coal and utility industries' fears, past air-pollution-protection measures helped protect millions of people from smog, acid rain, and soot particles, and new carbon-pollution safeguards are essential for Americans’ health and economy.
Despite coal and utility industries' fears, past air-pollution-protection measures helped protect millions of people from smog, acid rain, and soot particles, and new carbon-pollution safeguards are essential for Americans’ health and economy.

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Published by: Center for American Progress on Mar 19, 2014
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1 Center for American Progress | Groundhog Days
Groundhog Days
Utilities Wrong Again About Pollution Safeguard Costs
By Daniel J. Weiss and Miranda Peterson March 19, 2014
Te lae, grea Harold amis’s comedy “Groundhog Day” has become culural shorhand or an even ha endlessly repeas isel. Tis is summed up when Andie MacDowell asks Bill Murray, “Do you ever have déjà vu?”, and Murray responds, “Didn’ you jus ask me ha?”
1
  When i comes o air-polluion reducions, coal and uiliy companies’ objecions o governmen proecions eel like “Groundhog Day” momens. ecenly, hese indusries have again prediced ha governmen polluion limis would resul in skyrockeing elecriciy prices. However, heir record as prognosicaors is quie poor. Teir pas predicions o doom were wrong, and so are heir curren claims ha he Environmenal Proecion Agencys, or EPAs, firs carbon-polluion cus or power plans would be disasrous. In Sepember 2013, he EPA proposed limis on carbon polluion rom uure power plans.
2
 Tis June, he EPA plans o propose he firs reducions in carbon polluion rom exising power plans.
3
 Coal and some uiliy companies are in ull “Groundhog Day” mode, roting ou he same ear-mongering claims abou zooming elecriciy raes and oher harms ha hey have alleged or years abou oher polluion saeguards.  Ye over he pas 40 years, experience has augh us ha indusry predicions o apoca-lypic coss rom polluion-conrol requiremens do no occur. In he 1970s, elecric uiliies and oher indusries orecased huge uiliy rae hikes rom he new clean air law,  bu in 1982, he Congressional Budge Office concluded ha he changes in cos were acually low.
4
 Te Edison Elecric Insiue, or EEI, is he lobbying arm or invesor-owned uiliies. As par o is campaign agains acid-rain-polluion reducions rom power plans in 1989, i prediced ha elecriciy raes in he lower 48 saes would significanly rise. wo decades laer, a Cener or American Progress analysis o EEI’s overall rae predicion deermined ha i was 16 percen oo high. (see able 1)
 
2 Center for American Progress | Groundhog Days
Far rom doing harm, hese pas air-polluion-proecion measures helped saeguard millions o people rom smog, acid rain, and soo paricles. Tese conaminans can lead o respiraory ailmens, rigger ashma atacks, and even cause premaure deahs.
5
 Te recen hyperbolic rheoric around EPA proposals o finally conrol carbon polluion rom power plans is simply a repea o pas hyseria. Tese new saeguards are essenial or Americans’ healh and economy. aher han ocusing on biased sudies, officials and he press should ocus on he huge coss o climae inacion: more smog, more ashma atacks, more erocious sorms, more droughs, and more wildfires.
A history of hysteria
Beginning wih he debae over he Clean Air Ac o 1970, polluing indusries and heir sympahizers have been crying wol abou cos increases due o polluion conrols. For insance, in 1972, Carl G. Beard II,
 
direcor o he Wes Virginia Air Polluion Conrol Commission, esified beore he Senae Public Works Commitee ha compliance wih he Clean Air Ac o 1970 by “elecric energy companies” would lead o “misakes o ha indusry [ha] will be placed in he rae base o he elecric companies.
6
 He claimed ha, “Consumers o power will pay or hese cosly errors or he nex 25 o 30 years.During he debae over he Clean Air Ac o 1977, “elecric uiliies and oher indusries complained ha scrubbers [o cu air polluion] were unreliable and cosly,” according o he
Congressional Quarerly Almanac 1977 
.
7
 Bu in 1981, he biparisan Naional Commission on Air Qualiy deermined ha such predicions o economic disaser under he Clean Air Ac were wrong. Te
Congressional Quarerly Almanac 1981
 repored ha he commission made he ollowing findings:
 Improved air qualiy had brough benefis worh fom $4.6 billion o $51.2 billion per  year, while coss o … polluion conrol equipmen were esimaed o have been $16.6 billion in 1978. … Te ac had no been an imporan obsacle o energy developmen. … Te law had no significanly inhibied economic growh.
8
Te Congressional Budge Office similarly debunked huge rae claims, deermining in 1982 ha “he average naionwide conribuion o [polluion conrols on power plans] o oal uure generaing coss should remain quie small.
9
Te implemenaion o he Clean Air Acs o 1970 and 1977 helped reduce air pollu-ion, proec public healh, and had a significan ne economic benefi o he naion.
Te
 
 New York imes
repored ha he Naional Commission on Air Qualiy deermined ha he law had resuled in a ‘significan’ cleaning up o he naion’s air and, even more imporan, prevened much more serious air problems.”
10
 An EPA assessmen ound ha here were “ne, direc, moneized benefis ranging rom 5.1 o 48.9 rillion dollars, wih a cenral esimae o 21.7 rillion dollars, or he 1970 o 1990 period,” due o reducions in diseases, learning impairmens, and premaure deahs.
11
 
3 Center for American Progress | Groundhog Days
1989 EEI utility rate study was also wrong
Te uiliy indusry doubled down on is apocalypic predicions during he debae over Presiden George H.W. Bush’s bill o reduce acid-rain polluion rom coal-fired power plans. On Sepember 7, 1989, Edward L. Addison, he presiden and CEO o Souhern Company, a major elecric uiliy, esified on behal o EEI beore he House Subcommitee on Energy and Power on he Bush acid-rain bill. He also submited an EEI-commissioned sudy or he hearing record.
12
 Addison esified ha, “We esimae ha he acid rain provisions alone o H.. 2020 could cos elecric uiliy rae payers $5.5 billion annually beween enacmen and he year 2000, increasing o $7.1 billion per year rom 2000-2010.”
13
 Te EEI sudy projeced ha raepayers in saes ha were heavily relian on coal-fired elecriciy would ace paricularly high rae increases. Addison claimed ha all elecriciy consumers in such saes would ace an average uiliy rae hike up o 13.1 percen rom 1990 o 2009 even under he bill’s “low cos” scenario. Addison concluded ha EEI’s calculaions “underesimae he rae shock ha would acually occur.”
14
 Based on is low-cos-o-compliance scenario, EEI orecased ha he acid-rain program  would lead o an average elecriciy rae increase o 3.2 percen beween 1990 and 2009 in he 48 coniguous saes. Tis would have led o an average naionwide 2009 elecric-iy rae o 10.8 cens per kilowat hour, or kWh, in 2009 dollars.  A he ime, i was impossible o prove ha hese prognosicaions were alse. Bu we can now compare EEI’s sae-specific rae predicions wih hose saes’ acual 2009 uiliy raes. No surprisingly, our analysis ound ha he EEI sudy was fla-ou wrong. In ac, CAP calculaed ha he average 2009 rae or hese saes was acually 9.5 cens per kWh󲀔16 percen lower han EEI prediced. (see he Mehodology secion or more inormaion on our calculaions) EEI esimaed ha 46 o he 48 saes sudied would experience an elecriciy rae increase o 0.1 percen o 13.1 percen beween 1990 and 2009. CAP ound ha by 2009, he elecriciy raes in 36󲀔more han hree-quarers󲀔o hese saes were lower han EEI had prediced. And o hese saes, 32 o hem had
lower 
 elecriciy raes in 2009 han in 1990󲀔in 2009 dollars󲀔even afer complee implemenaion o he acid-rain provisions o he Clean Air Ac. Elecriciy prices had decreased during his ime  because o lower uel ransporaion coss, deregulaion, and oher acors.
15
 In his esimony, Addison cauioned ha saes wih a significan porion o heir elec-riciy generaed by coal would experience some o he larges rae increases, including several saes wih double-digi rae increases. Tis prophecy was also alse. CAPs analy-sis deermined ha 9 o hese 10 heavy-coal-burning saes had average 2009 elecriciy raes lower han EEI prediced, and 8 o 10 had 2009 raes lower han in 1990 in 2009 dollars. (see able 1)

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