The EPA’s New Power Plant Rules Will Drain the Energy Out of America’s Power Grid

By: Juan Londoño

Last week, the Biden administration’s Environmental Protection Agency (EPA) announced its final set of rules for America’s power sector, mainly targeted at fossil-fueled power plants. These rules would place stringent and complex greenhouse gas emissions standards in hopes to accelerate the administration’s desired transition to renewables. Not only are these new rules likely unconstitutional, but they will also further strain an already stressed power grid. This will likely subject Americans to energy shortages, blackouts, and higher energy prices.

As members of the House Committee on Energy and Commerce have already pointed out, the rules under the Clean Power Plan 2.0 would introduce over 800 pages of additional regulations for fossil-fuel power plants. There is no doubt that the resulting regulatory environment will be a costly and complex endeavor for energy providers to navigate.

The plan’s shortcomings are not only in its economics, but also its legal standing. The first version of the plan has already failed constitutional scrutiny. The Supreme Court ruled that only Congress can make “decision[s] of such magnitude and consequence.” This new power plan does not seem to have remediated the issue, and thus will only generate regulatory uncertainty while the legality of the rules are weighed in the courts (before a likely ruling against the EPA).

If implemented, the plan would place a significant strain in America’s power grid. As the Institute for Energy Research has pointed out, the plan’s onerous requirements could compromise the operations of natural gas and coal power plants, which supply about 60 percent of the U.S. demand. The Edison Electric Institute has raised similar concerns, expressing significant concern over the rule’s standards on carbon capture and storage. Most of the necessary technologies are not ready for a full-scale, nation-wide deployment. They also criticized the EPA’s unrealistic 2032 timeline, as it would be impossible for utility companies to successfully finance, permit, and build the necessary infrastructure before the plan’s deadline.

In times of runaway inflation with a power grid facing record-high stress levels (in part due to the transition to the digital economy and a policy-induced increase in adoption of electric vehicles), reducing the efficiency of the existing power supply chain is a contravention of common sense. With this new plan, taxpayers will end up footing the bill for a more costly, less efficient, and less reliable energy supply.