State, residents will pay huge cost under Clean Power Plan
President Obama and the EPA’s Clean Power Plan is costing West Virginia’s economy billions of dollars and tens of thousands of lost jobs since its inception as the law of the land. The impact on the state budget, coal companies and coal-related jobs, as well as the negative impact on the development of the Marcellus and Utica gas fields, has the potential to wreck the economy of West Virginia for generations to come.
The regulation, which aims to reduce carbon dioxide emissions from existing power plants, is expected to deliver a major blow to the nation’s coal industry, which has prompted major backlash from coal-producing states like West Virginia.
Ironically, 85 percent of the electricity produced in West Virginia is consumed out-of-state. Yet the negative consequences of compliance fall squarely on where those power plants are located — primarily, here in West Virginia.
Under the Clean Power Plan, states are allowed to choose whether to employ either a rate-based goal, measured in pounds of CO2 per megawatt-hour, or a mass-based goal, measured in total short tons of CO2 emissions.
States also have the option to implement trading emission rate credits, or ERCs, which are generated by zero and low CO2 emitting power or energy efficiency projects that reduce coal usage within a single state, multi-state or regional area, or nationally.
In the mass-based approach, they use allowances, which result from the shutdown or reduced operation of higher CO2 emitting power sources, like coal plants.
The rate-based model — which doesn’t allow trading — was projected to bring the most detrimental impacts to the state in the form of coal plant closures and employment losses.
Jim Kotcon, conservation chair for the West Virginia Chapter of the Sierra Club posed the following questions to the State Journal: “Do we want to allow emissions trading, which would certainly reduce the cost for West Virginia citizens? Do we want to include forms of energy efficiency? Do we want to consider giving utilities some flexibility in switching between coal and natural gas?
West Virginia also will have to face uncertainties beyond its own control.
“If EPA’s rule survives the legal challenges, there are 46 other states that must either develop a state plan or face the imposition of an EPA-developed federal plan,” the study noted. “Decisions these other states and the EPA make are beyond the control of the WVDEP or the West Virginia Legislature
These decisions will impact the market for the West Virginia-mined coal that is currently being burned for power in those states, as well as the market for West Virginia-produced coal-fired power that is used in other states.
Under the mass-based approach with national trading, electric industry sales are projected to decline by only $140 million relative to the “business-as-usual” (BAU) model in 2030. Under the rate-based approach with no trading, on the other hand, industry sales are projected to decline by $2.3 billion relative to the BAU.