The PJ Tatler

Power Plant Shutdowns, Slowdowns May Follow New EPA Regs in Texas

As predicted, expected and forecast, now that the EPA has included Texas in its cross state emissions regime — despite its own science to the contrary — a major power plant owner is weighing several drastic and negative consequences to its business.

The major electric power provider for much of North and West Texas is considering how to respond to new federal clean-air regulations, including closing or reducing operations at some of its coal-fired plants and coal mines, according to a regulatory filing Wednesday.

In a filing with the U.S. Securities and Exchange Commission, Energy Future Holdings Corp. said it was considering the shutdowns or slowdowns, as well as seasonal or temporary shutdowns. The Dallas-based owner of Luminant Generation Co. also said it was considering the option of installing scrubbers to remove sulfur dioxide from plant emissions, or even switching fuels to fire the furnaces that generate the steam used to generate electric power.

The fallout from whatever Luminant decides to do is straightforward. Shutdowns will drive up unemployment and power rates. Slowdowns will drive up unemployment and power rates. Adding scrubbers will drive up power rates. Not to put too fine a point on things, but this is a tax by another name. It’s also a job killer. If it were actually being done in the name of clean air then there might at least be a salutary effect worth considering, but the EPA’s own study said that Texas’ emissions have at most a negligible impact on other states, and this is a cross state emissions rule. Texas was added at the last minute, likely to shorten the amount of time the state and industries within would have to react.

Luminant may sue to stop the EPA, but it acknowledges that any suit will take years and there is no guarantee that they will prevail. Whether they do or not, the suit will cost millions. And guess where those costs will come from.

It’s quite something to step back for a minute and just observe how the Obama administration is treating the states. ObamaCare shifted billions in Medicare costs to all of the states without any clue of how to pay for it all. State budgets that are already on the razor’s edge thanks to the recession as well as overspending may well just explode once ObamaCare kicks in. The administration is now suing Arizona (twice), South Dakota and Louisiana for various reasons, and is making moves to kill off jobs in South Carolina and Texas in more than one industry. I could be wrong, but I don’t think we have ever seen an administration treat the states with such obvious contempt.

Update: Geez.