Will Texans Suffer Higher Electric Costs Because the Governor and the Legislature Failed to Act?
There may not be a better example of government overreach and interference than that of the Environmental Protection Agency (EPA.) Nor a truer picture of the failure of state sovereignty efforts than those demonstrated by the state of Texas in its ongoing, and in large measure, futile, battle against the federal agency.
That battle, however, is likely to take on a whole new meaning to Texans beginning in January.
The new Cross State Air Pollution Rule seems to have noble intentions: reduce air pollution so that Americans are healthier. But they ignore a basic economic principle, you know, the one that say’s “There’s no such thing as a free lunch.” Changing the emissions of power plants will cost money, and those costs are, of course, passed on to the consumer. The U.S. Small Business Administration recently reported on the regulatory burden and its impact on small businesses. The costs of major new regulations in the U.S. are up over $25 billion in 2010 alone.
Texans will begin to feel the pinch if, as The Electric Reliability Council of Texas (ERCOT) predicts, coal generators in the state slow production. Coal accounted for 40% of electrical consumption in 2010 in Texas. We’ll then see another basic economic principle come into play: the one about supply and demand. When supply falls and demand remains constant or increases, so do prices. This price increase won’t be driven by the free market but instead altered by the meddlesome intrusion of the federal government…and the failing of the state to protect its citizens, including its energy producers.
The restrictions on plants in Texas were not released by the EPA until July 7 and are to take effect January 1, 2012. It is thought that electric providers, specifically coal generators will not be able to make the operational responses required in time to meet the deadline and thus may be forced to limit or shut down operations.
There’s more to this story than a poorly planned deadline. The Texas Public Policy Foundation wrote that the EPA’s data does not show Texas emissions high enough to be included in the new rule. “The EPA justifies saddling Texas with this onerous regulation based on the flimsiest speculation — not needed environmental benefits, but based on what might occur in the future.”
Some believe the EPA has singled out Texas energy producers. The original draft of the rule did not include Texas because there was no data showing that emissions from Texas harmed people in other states. The EPA changed the data when announcing the final rule. Because Texas wasn’t included in the first draft, Texas wasn’t included in a forum for the states to comment on the new regulations, thus violating the Administrative Procedures Act. An El Paso Times column concludes, “The EPA has once again gone beyond their mission by recreating their own science.”
Whether or not greenhouse gases are harming people, the free market is best equipped to address the need and states are the proper venue for addressing the requisite environmental regulation. The Texas Commission on Environmental Quality has a job to do and it should do it. But Texas also has a job to do, hold the federal government to its constitutional authority and insure that all other powers are reserved to the great state of Texas.
The EPA is government interference at its worst. Its regulation steals resources that should be dedicated to innovation and productivity. Instead of focusing on improvements, the energy industry has to focus on working the political system. The end result of excessive government regulation is a system of crony capitalism that is killing American ingenuity and killing the Texas economy. While the proclaimed intention of these EPA rulings is to make the U.S. healthier for individuals, the consequences will be more expensive energy. Texans are likely to suffer black-outs, and many won’t be able to pay their electric bill. Will impoverishing Texans make them healthier?
What can Texans do to prevent federal regulations from depriving us of affordable electricity? Some see a critical need for state legislation to limit federal overreach. The 82nd Legislature had the opportunity to prevent the sort of hoop-jumping occurring now. House Bill 3188 would have made it illegal for a state employee to implement any regulations from a federal agency. The bill would have reaffirmed the authority of the Texas Commission on Environmental Quality to monitor the Texas power industry. The bill passed out of committee but was never scheduled for a hearing on the House floor. Despite public complaints against heavy-handed federal agencies, elected leaders in Texas did not take action when they had a chance.
Several of those leaders are now running for higher office, ironically, on a state sovereignty platform. Many are likely to seek re-election on that same platform, and yet as the hot iron was in their hands in 2011, they failed to strike. Let’s remember that as the elections roll around.
Further reading:
Property and Environment Research Center describes how federal regulations of air and water pollution remove the ability of individuals to sue for damages caused by pollution, with detrimental effects to the environment.
Cato Institute explains how the Baptists and Bootleggers parable applies to legislation directed at climate change.
