Think tank takes EPA to task for Clean Power Plan’s impact on co-ops

The Buckeye Institute, a Columbus-based political think tank, offered up a sobering analysis of the EPA’s Clean Power Plan this week:

“President Obama’s Clean Power Plan, if implemented, will cost consumers and businesses hundreds of billions of dollars. Rural electric cooperatives, including Buckeye Power in our state, will get whacked especially hard because The Buckeye State depends heavily on coal to produce power.

“So when the folks at the National Rural Electric Cooperatives Association saw the Environmental Protection Agency’s rosy estimate of what the Clean Power Plan regulation would cost them, they thought, ‘Hmmm, that seems mighty low.’

“The association decided to fact check EPA’s estimate that the regulation would cost rural co-ops $109 million to $133 million in 2030, the only year estimated. Shutting down just one coal plant early in its life cycle can cost more than $133 million, so the EPA’s calculation seemed implausible for the cost of shutting down many coal plants.

“The association commissioned an independent analysis to get its own estimate. The result: Clean Power Plan compliance will cost rural co-ops (and their customers) $2.5 billion to $3.6 billion in 2030.

“The EPA wasn’t required to estimate the regulation’s impact beyond a single year – and that’s all it did. But the trade group’s consultant, conducting a more business-like assessment, predicted the Clean Power Plan will cost rural co-ops $11.7 billion to $20.3 billion from 2022 to 2030 as carbon dioxide reduction requirements are phased in.

“What accounts for the gigantic difference? The regulators didn’t accurately represent how coal plant ownership works. Rural co-ops are small players in the energy business and frequently own minority stakes in power plants, perhaps 5 percent or 10 percent or 25 percent.

“The (EPA) included only those co-ops that are majority owners of coal plants projected to be in operation in 2030; it excluded from its analysis the many co-ops that own partial, non-majority shares of coal units. NRECA’s analysis reflects costs to 230 affected generating units both fully and partially owned by all 31 small entity electric co-ops.

“It’s no exaggeration to say the regulators’ estimate showed little understanding of how business works in the real world.

“It isn’t clear how much of the multi-billion dollar cost will fall on Buckeye Power customers. The co-op supplies electricity to 400,000 homes and businesses in 77 of Ohio’s 88 counties.

“At the moment, Buckeye Power doesn’t foresee the need to prematurely close any Ohio coal plants. But it is clear that the Clean Power Plan, if enforced, will make turning on the power more expensive than the Obama administration is telling us.”