Study: EPA regulations to cause W.Va. energy prices to soar

WASHINGTON – Another study is projecting staggering economic impacts to West Virginia resulting from a series of federal Environmental Protection Agency regulations, including a proposed plan to regulate carbon dioxide emissions from existing fossil-fuel power plants.

The study, “Energy Market Impacts of Recent Federal Regulations on the Electric Power Sector,” was released Thursday by Arlington, Va.-based Energy Ventures Analysis Inc., which provides market analyses of the energy industry.

It was commissioned by Peabody Energy, the largest private-sector coal company in the world.

The study found that the EPA’s proposed Clean Power Plan, along with other regulations and rising natural gas prices, will increase the cost of electricity and natural gas by nearly $300 billion in 2020 compared with 2012.

Among its other findings: the typical household’s annual electricity and natural gas bills would increase by $680, or 35 percent, escalating each year thereafter as the agency’s regulations grow more stringent.

In West Virginia alone, the average household’s electricity and gas bills would increase by $750 in 2020, the study found.

That represents a 38 percent increase, with average annual power bills increasing more than $335 and average home gas heating bills rising by $415.

In total, the annual cost of power and gas will grow to more than $4 billion in 2020, the study found. That represents a $1.3 billion annual cost increase for electricity and gas in West Virginia.

The study also concluded that U.S. power markets would see a shift in electricity generation from coal to natural gas, causing upward pressure on natural gas demand and prices.

Currently, West Virginia receives 95 percent of its electricity from coal.

“Our analysis is the first to fully examine the combined economic impacts of the EPA’s long list of proposed and finalized regulations on the electric power industry, including the Mercury and Air Toxics Standards, regional haze regulations and the Clean Power Plan, whose four building blocks are based on flawed assumptions,” Energy Ventures President Seth Schwartz said.

“For example, existing coal-fueled generating facilities are already operating at very efficient levels and, collectively, will not be able to achieve an additional six percent heat rate improvement.”

Under the EPA’s proposed Clean Power Plan, new large natural gas-fired turbines would need to meet a limit of 1,000 pounds of carbon dioxide per megawatt-hour, while new small natural gas-fired turbines would need to meet a limit of 1,100 pounds of carbon dioxide per megawatt-hour.

New coal-fired units would need to meet a limit of 1,100 pounds of carbon dioxide per megawatt-hour, and would have the option to meet a somewhat tighter limit if they choose to average emissions over multiple years, giving those units additional operational flexibility.

The agency has tasked the Mountain State with a carbon emissions reduction target of 20 percent by 2030.

A separate study, released last month by National Economic Research Associates Inc., has projected “significant negative economic impacts” to West Virginia under the proposed carbon reduction plan.

NERA’s analysis found that electricity rates could face a peak-year increase of 14 percent in the state.