Energy and Commerce Leaders Continue to Press Administration To Provide Total Cost of Utility MACT Rule

February 22, 2012

WASHINGTON, DC - Republican members of the Energy and Power Subcommittee today wrote to White House Chief of Staff Jacob Lew to ask that EPA disclose the cost of its recent Utility MACT regulation. Members are asking Lew to ensure EPA adheres to President Obama's Executive Order 13563, which requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs of regulations. EPA has yet to produce an estimate of the full costs of the regulation, and agency officials have suggested they have no intention of ever doing so.

At a recent Energy and Power Subcommittee hearing, members repeatedly asked EPA Assistant Administrator Gina McCarthy for the total cost of the rule. When pressed by Rep. Ed Whitfield, chairman of the Energy and Power Subcommittee, McCarthy responded, "The figures that you are asking me for, and that Congressman Upton has asked us for as well, are costs that we don't establish." Instead of accounting for the total cost, EPA provided the public with a "snapshot" estimate, which paints a misleading picture for Americans who are concerned about how the regulation will impact electricity prices and employment. An independent analysis projects the rule would cost utilities $84 billion in capital investment alone by 2015. To absorb these costs, utilities will increase electricity rates, placing an even greater strain on our fragile economy and American households. Energy and Commerce Republicans believe it is crucial that EPA comply with President Obama's Executive Order and provide an estimate of the total cost (the "sticker price") so that we can understand the economic implications of this rule.

"We write to ask that the Administration ensure that EPA provide an estimate of the total cost of this regulation.  While EPA in its Regulatory Impact Analysis (RIA) accompanying the rule identifies annualized compliance costs for coal fired-generation to be $9.4 billion in 2015, $8.6 billion in 2020, and $7.4 billion in 2030, this represents only three selected years and does not reflect the full costs, which the RIA reflects are amortized over a period of 30 to 40 years. The Committee has received expert testimony projecting that for the capital costs alone the rule will require the U.S. electricity sector to raise an estimated $84 billion in additional capital investment before 2015, which would represent a 30% increase over project capital spending currently projected within that sector. As such, this will be the single most expensive EPA rule ever imposed on the electric utility sector and American ratepayers," wrote the members.

For a full copy of the letter, click here.

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