Update on Job Losses, Electricity Price Hikes Caused by EPA’s Big Mercury Lie

In December, EPA finalized the Mercury and Air Toxics Rule, one of the most expensive regulations, ever. The Agency says it would cost $10 billion per year; industry estimates are much higher.

In press releases, EPA claims that the rule is necessary in order to protect fetuses from developmental disorders engendered by mercury emissions. This is not true. In fact, EPA found that it is necessary and appropriate to regulate mercury emissions in order to protect a population that doesn’t exist: pregnant, subsistence fisherwomen, who annually consume more than 300 pounds of self-caught fish, from exclusively the 99th percentile most polluted freshwater inland water bodies.

The ridiculous Mercury and Air Toxics Rule is only a couple months old, but it’s already having a big impact. On January 26th, Ohio-based utility FirstEnergy Corps announced that it would shutter 6 coal fired power plants, and it cited the mercury rule as the primary reason. The company said 530 employees would be affected by the decision. Some will be relocated, but many will lose their livelihoods. Last week, the Associated Press reported that electricity prices in Ohio regions serviced by FirstEnergy are expected to double, due to the smaller supply of power engendered by EPA’s mercury regulation. In addition to job losses, the absurd mercury rule is raising electricity prices.

Today, FirstEnergy Corp. announced more plant closures caused by the Mercury and Air Toxics Rule. According to a press release issued this morning,

AKRON, Ohio, Feb. 8, 2012 — FirstEnergy Corp. (NYSE: FE) announced today that its Monongahela Power Company (Mon Power) subsidiary will be retiring three older coal-fired power plants located in West Virginia by September 1, 2012. The decision to close the plants is based on the U.S. Environmental Protection Agency Mercury and Air Toxics Standards (MATS), which were recently finalized, and other environmental regulations.

The company says that the closures will affect 105 jobs.

Also today, the Energy and Power Subcommittee of the Energy and Commerce Committee held a hearing on the impact of the Mercury and Air Toxics Rule. Here are the testimony highlights:

• EPA Assistant Administrator Regina McCarthy dismissed concerns that the mercury rule would affect reliability. According to McCarthy, “EPA’s resource adequacy analysis continues to demonstrate that only a modest amount of generating capacity will become uneconomic to operate under the MATS standards, and removal of this capacity will not adversely affect capacity reserve margins in any region of the country.” This is far from reassuring, however, as EPA’s reliability analysis has been shredded by both federal regulators and other impartial experts. As I explain in a previous post, no one knows whether the Mercury Air Toxics rule would turn out the lights. Only regional transmission organizations—the independent, non-partisan entities that operate the grid—have the expertise to know whether the regulation could affect reliability, and they’ve not yet weighed in.

• Ralph L. Roberson, President of RMB Consulting & Research, Inc., testified that “no technology is available that can meet [the standards established by the mercury rule]. The stringency of the new-unit standards means that no new coal-fired EGU can be built under these standards. In essence, EPA ha adopted standards that prevent the country from building new coal-fueled units.”

• Darren MacDonald, Director of Energy at Gerdau Long Steel North America, stated that “The steel sector is concerned about increased electricity costs and reliability issues that may result from this regulation. This is for the simple fact that all of the compliance costs and reliability risks will ultimately be passed on to us, the consumers. Our concern is that a confluence of new EPA regulations on the utility sector over the next 5 years – capped by the [Mercury and Air Toxics] Rule – will have a substantial impact on our direct cost of doing business.