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IECA Blasts CPP: ‘Lower Power Costs Improbable, If Not Impossible’

August 12, 2015 By Cheryl Kaften

The Industrial Energy Consumers of America (IECA) has released a statement protesting provisions of the Clean Power Plan announced on August 3 by the US White House and the Environmental Protection Agency, claiming the new law “results in significant costs with insignificant benefits.

First and foremost, the Washington, DC-based trade group complained that the plan’s greenhouse gas (GHG) rules “put the EPA in charge of state electric system decision-making, which is unprecedented in our nation’s history.”

What’s more, IECA asserts, the rules substantially reduce the use of America’s lowest cost energy sources – coal and natural gas – all, while increasing the use of renewable energy, “the most expensive and unreliable source of energy.”

IECA President Paul Cicio described IECA member companies as energy-intensive trade-exposed (EITE) companies, meaning that relatively small changes to their cost of energy can negatively impact their competitiveness.

On the whole, the group has identified three significant ways in which the Clean Power Plan puts its membership – manufacturing companies with $1.0 trillion in annual sales, over 2,900 facilities nationwide, and with more than 1.4 million employees worldwide – at a disadvantage:

  • It creates significant costs with insignificant benefits: It is inconsistent for the Obama Administration to tout support for middle-class job creation, IECA states, while continuing to increase costs and barriers to producing manufactured goods in the United States. All of these costs on the manufacturing sector weigh heavily on investment, job creation, and global competitiveness. And since 2000, the manufacturing sector is still down 4.9 million jobs.
  • It shifts GHG emission leakage to other states: The EPA and several states have underestimated the cost of the EPA’s GHG rules, because they have not taken industrial GHG leakage into consideration, the trade group claims – noting that it is important to remember that the industrial load often operates 24/7, and this keeps rates lower for the residential ratepayer than they would be otherwise. When a state’s electricity prices increase, manufacturing facilities with multiple locations will shift their production to other states with lower electricity costs. Some will be able to switch quickly; for others, it will take more time. The reduction of industrial load will increase costs to all other remaining ratepayers in the state, and shift GHG emissions to other states as well.
  • It puts U.S. manufacturers at a global disadvantage The manufacturing sector must have a level playing field with global competitors, IECA asserts – demanding that, “Offshore competitors, which import product into the United States, must be held to the same environmental standards as domestic manufacturers, or GHG leakage of jobs and emissions will occur, which accomplishes nothing environmentally”

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