Clean Power Plan Will Mean 'Economic Disaster,' State Business Groups Warn Court

Feb 24, 2016 - 3:45pm

Senior Editor, Digital Content

The Supreme Court may have pressed pause on EPA’s Clean Power Plan, but with a federal court hearing coming up in June, a broad coalition of state and local business organizations told the court that these carbon regulations will be an “economic disaster.”

One-hundred sixty-six groups in 40 states--including the Pennsylvania Chamber of Business and Industry, the Ohio Chamber of Commerce, and the Texas Association of Business--joined a friend-of-the-court brief supporting lawsuits to overturn the Clean Power Plan.

The Clean Power Plan (CPP) will require states to make drastic reconfigurations of their electrical systems in order to lower U.S. carbon emissions from the power sector by 32% by 2030. Much of these reductions will come from abandoning coal-fired power plants.

This will mean a lot of economic pain, the chambers explain:

By reconfiguring the nation’s power sector in an extremely short period of time, the Rule will raise the cost of operations for countless businesses. That approach, in turn, threatens to drive jobs overseas and force businesses to close, causing harm to communities that provide the workforce for this industry.

“The EPA’s actions would impose costly regulations that totally ignore the huge negative impacts on America’s job creators at a time when businesses are finally starting to get back on their feet after the Great Recession, said Ohio Chamber of Commerce President & CEO Andrew E. Doehrel in a statement.

At the same time, “consumers will see their electricity rates rise as affordable power sources close and utilities are forced to build expensive new plants,” the chambers caution.

Forty states could see an average retail electricity price increase of at least 10% from the Clean Power Plan, according to NERA Economic Consulting.  As a result, households will have $64 billion to $79 billion less to spend.


In addition to pointing out its economic harms, the chambers also argue that the CPP usurps state authority:

Congress recognized that the States, not the federal government, have the facts on the ground and the relationships with local businesses and communities needed to determine what emission rates and compliance deadlines are actually achievable by existing sources in that State. The Rule nakedly disregards Congress’s directive, replacing this cooperative-federalism model with an unprecedented federal command-and-control structure.

Instead of allowing States to implement and enforce performance standards for existing emissions sources, however, the Rule scraps Congress’s design in favor of a centrally-designed, blunderbuss approach. In so doing, EPA has adopted a regulatory model that does not (and cannot) account for the unique circumstances that different communities throughout the nation confront.

Texas Association of Business CEO Bill Hammond emphasized this point stating, “We look forward to the opportunity through the legal process to expose this rule for what it is – an illegal attempt at assuming federal control of each state’s electric power system and energy economy."

“The command-and-control approach EPA is using is both unnecessarily costly and legally questionable,” added Pennsylvania Chamber President and CEO Gene Barr.

This brief by state and local chambers follows similar arguments filed by a coalition including officials from 27 states and more than 150 other organizations—including the U.S. Chamber--and 205 members of Congress. All are making the case that the courts should toss out EPA’s regulatory overreach.

Editor's note The map has been updated.

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.