Unfunded Burden of EPA Mandates on States Grows

Protecting the environment is a noble goal. However, when the EPA issues mandates that are not reasonable, states suffer. A new U.S. Chamber report has more:

How can states administer 96.5% of all federal delegated environmental programs when federal grants to the states fund no more than 28% of the amount needed to run the programs? The study, the eighth in a series on the federal regulatory process, concludes that instead of being the system of cooperative federalism that Congress intended, the current relationship between the Environmental Protection Agency (EPA) and the states has become one-sided, with the federal government imposing its will.

The U.S. Chamber recommends Congress take specific steps to alleviate and prevent EPA from continuing to commandeer the states. These recommendations include redefining the term “mandate” to better track the impact on the states, passing the Regulatory Accountability Act of 2015, enacting the Sunshine for Regulatory Decrees and Settlements Act, and several other actions outlined in the study.

Chamber-Supported Clean Power Amicus Brief Filed in D.C.

36886821The Indiana Chamber joined 166 other state and local business associations from 40 different states in an amicus brief filed in the U.S. Court of Appeals for the D.C. last Tuesday. Circuit explaining the devastating economic impact posed by the EPA’s carbon regulations.

The lawsuit, which will be considered by a federal appeals court this summer, involves EPA’s “Clean Power Plan” rules, which aim to reconfigure state electricity systems. It is expected to be a landmark case that could shape Indiana’s energy and economic
future.

In issuing these regulations, the EPA purports to have discovered the authority to regulate how states generate, transmit and use electricity, without any authority from Congress to do so.The coalition’s brief outlines major legal and economic concerns with the rule, arguing that EPA has trampled on the rights of states to determine their own energy mix and implement environmental standards in a manner tailed to their own circumstances.

The availability of affordable electricity is a key feature of keeping America competitive in a global economy.The brief explains that EPA’s challenged rule will pose significant harm to regional and local communities, particularly in economically challenged rural areas.

Affordable, reliable energy provides our members a critical advantage in today’s intensely competitive economy. If the courts uphold EPA’s rule, that advantage could be lost and American consumers will be left footing the bill, leading to adverse ripple effects throughout the economy, which will threaten individual businesses, countless jobs and entire communities.

By prematurely and unnecessarily forcing power plants to close, EPA’s regulation will result in higher costs for electricity and all the goods and services that depend on it, which means less money remaining for health care, food, education and other critical needs.

The Indiana Chamber’s brief echoes the call from nearly 160 challengers that have filed suit against EPA, including 27 states, and a host of business, labor and consumer groups.

A decision in the case is likely to be issued by the Court of Appeals for the D.C. Circuit later this year. From there, the challenge is expected to make its way to the Supreme Court, which has ordered EPA to halt all implementation and enforcement actions on the rule until it has the opportunity to consider the case.

Temporary Halt to EPA Clean Power Rule

10044552Last summer, President Obama attempted to circumvent Congress by implementing increased regulation of carbon emissions from power plants through the Environmental Protection Agency (EPA). This was after his climate change legislation failed twice in Congress. However, it is the responsibility of Congress – not the administration – to set policy. The successful Supreme Court appeal centered on that point.

These proceedings are especially important for Indiana, which is the number one per capita manufacturing state in the nation. Over 80% of Indiana’s electric power comes from coal, compared to only 45% for the country. Despite diversification efforts, coal remains Indiana’s primary energy source.

Skipp Kropp, attorney at Steptoe & Johnson PLLC and a member of the Indiana Chamber’s Energy Committee, summarizes the legal battle and what it means. Further analysis available from the Competitive Enterprise Institute.

EPA Releases New Ozone Limits

Although our air, land and water are cleaner than arguably before the Industrial Revolution, the Environmental Protection Agency (EPA) earlier this month announced its new restrictive ground-level ozone standard: 70 parts per billion (ppb). It could have been set even lower – at 65 or even 60 – which would have been more restrictive and affected a large portion of the Indiana population.

At 70 ppb, we believe that all Indiana counties will meet the standard and thus be in “attainment.” However, there is a monitor in Wisconsin that will trip the Chicago area into nonattainment and include the Indiana counties of Lake and Porter. The consequence of “nonattainment” means that there can be no business expansion or new business unless that expanded or new business does not add any additional components to the area’s ozone. Essentially, it would stop any expansion, growth or new business. Additionally, Clark and Floyd counties will likewise be pulled into the Louisville nonattainment status and there is an outside chance that a county or two near Cincinnati may be affected.

Indiana will likely meet this new 70 ppb standard because power plants have shut down or made the very expensive changes necessary to shift over to natural gas as a result of the many EPA requirements designed to eliminate coal The Indiana Chamber has strongly opposed these anti-coal provisions and will continue to do so because, despite diversification efforts, coal remains Indiana’s primary energy source.

Cheer Earth Day, Not EPA’s Latest Moves

87741351Something to celebrate for Earth Day: Indiana’s air quality has not been as good as it is today in over 60 years! I remember the first Earth Day 45 years ago and for a decade served on the Indiana Earth Day board. I’ve witnessed step by step Indiana’s group effort to make the air cleaner and cleaner.

Today, more than 90% of Hoosiers live in areas that meet ALL air quality standards. In 2005, that number was only 61%. To monitor all the air quality and progress, Indiana operates and maintains more air quality monitoring sites than any other state in the Midwest on a per-person basis. We’re on top of it.

Indiana does have a few remaining air issues in pockets of the state, but those are being addressed. Whether that’s the lead level in Muncie, the ozone standard in LaPorte County or the one-hour sulfur dioxide standard in parts of five counties – all are making progress and should be remedied in a reasonable timeframe.

Still business and industry in Indiana and across the nation continue to be whipped by the Environmental Protection Agency (EPA) with regulations that are grossly unfair and frequently tightened on a whim. All the vast improvements go unnoticed and the goalposts keep moving further and further away. Ironically, as our ozone levels have declined, the incidence of childhood asthma has actually increased.

The impact of EPA’s pending controls is real and will cost every business and person that uses electricity. Yet there is no real environmental benefit that will be realized. Industry in the U.S. and Indiana has spent billions of dollars installing expensive pollution control equipment. The data clearly shows that our emissions have substantially decreased. In other words, we’ve pretty much squeezed everything out of the ozone orange.

Over the many years, Earth Day has helped bring attention to industry practices that needed scrutiny. That was a very good thing. But the EPA is taking its efforts too far. It’s time for all of us to take a deep breath and exhale. And you know what? We can do that outside today because the air is so much cleaner.

Waters of the United States Informational Meetings Around Indiana in August

The Indiana Chamber is working with the Indiana Farm Bureau and many other business and industry groups to strongly communicate our deep concern about the EPA and Army Corps of Engineers proposed expansion of federal regulatory jurisdiction under the Clean Water Act? This will expand federal control over Waters of the U.S. (WOTUS) – to which we are opposed.

As you will see below, The Farm Bureau is holding a series of informational meetings around the state and YOU are invited. Be sure to register if you will be attending.

If you’d like more information, reach out to Justin Schneider (317-692-7835 or 317-919-8087) or Kyle Cline (317-692-7845 or 317-502-7415). The schedule is below, and here is the full listing that includes locations:

  • August 5: 2-4 p.m. in Tipton County
  • August 7: 9-11 a.m. in Decatur County
  • August 7: 7-9 p.m. in Randolph County
  • August 18: 10 a.m.- noon in Vigo County
  • August 18: 7-9 p.m. EST /6-8 p.m. CST in Jasper County
  • August 21: 1-3 p.m. in Marshall County
  • August 21: 7-9 p.m. in Dekalb County
  • August 28: 9-11 a.m. in Monroe County
  • August 28: 3-5 p.m. in Tippecanoe County

Comment Period Open for EPA’s Latest Carbon Regulation

Potentially devastating to our state. That’s how we view a new Environmental Protection Agency (EPA) regulation to strictly limit carbon emissions from the nation’s existing coal-fired power plants. This latest proposal comes on the heels of a plan to put in place greater pollution controls for any new power plants.

The President has left no doubt that he is mounting an all-out war against coal. Congress refused to bite on a climate change bill, so he’s spending his second term trying to legislate via the EPA. Smart, necessary regulations make sense, but that’s the opposite of what we have here; it’s entirely unreasonable given our nation’s energy needs.

These EPA regulations also will barely even move the needle toward reducing carbon emissions (not even by 2% according to the U.S. Chamber of Commerce’s Institute for 21st Century Energy), but they will deal a tangible blow to the national and state economies.

The Institute for 21st Century Energy predicts the regulations will result in a whopping $51 billion in annual economic losses through 2030. On top of that, some 224,000 Americans will lose their jobs and consumers will pay $289 billion more for electricity. Separately, the U.S. Department of Energy has estimated the electricity cost increase could be as much as 80%.

Most Hoosier businesses and families can’t afford to pay that, and they certainly can’t afford a slumping economy and job market.

The reality is that Indiana will be hit far harder than most states because it’s the number one per capita manufacturing state in the nation. Over 80% of Indiana’s electric power comes from coal, compared to only 45% for the country. Despite diversification efforts, coal remains Indiana’s primary energy source.

For decades, companies that have located in Indiana have often cited a reliable and affordable supply of electricity among the determining factors, according to site selectors and information gathered by state government. Losing that competitive advantage entirely is now a real possibility with coal coming under attack by the Obama administration.

We encourage you to let the EPA know your thoughts on this latest regulation by visiting www.indianachamber.com/EPA. Also, let your members of Congress know; they need to take action before irreparable damage is done to our economy.

High Electricity Prices are Bad for Everyone

The headline might seem like an obvious one – you’ve most likely seen your energy bills go up over the last several years. But it’s not just families struggling to pay high electric bills. Hoosier companies, particularly those that are energy intensive (such as manufacturing facilities), face exponentially-higher sticker shock when it comes to paying the electricity bill.

And the consequences of companies paying more for electricity is far-reaching: less money for employees, higher prices for consumers, fewer opportunities to expand and lost economic development chances.

Here’s a little history: In the early 2000s, Indiana was fifth lowest in the country, in terms of electricity prices. Today, the state has fallen to the middle of the pack, around 27th lowest.

The State Utility Forecasting Group (SUFG) out of Purdue University puts together electricity forecasts every two years. The current forecast (released at the end of 2013) points to prices increasing by over 30% over the next 20 years, with electricity demand in Indiana staying almost stagnant.

We look at the reasons for the higher prices and the lower demand in the new edition of BizVoice®. I spoke with the director of the SUFG, as well as the president of a small foundry in Rochester and a representative from the Indiana Industrial Energy Consumers, Inc. (which represents some of the state’s largest industrial energy users) for their reactions to the SUFG report.

While I didn’t have the opportunity to include an email interview with Wayne Harman, manager of energy procurement from ArcelorMittal USA, I’m able to share some of it here. Here’s a shortened Q&A:

BizVoice®: What is the consequence of high electricity prices for a large energy-intensive company like ArcelorMittal USA?

Harman: “Higher electricity costs translates to net higher costs for manufacturing finished steel products. Added costs cause inflationary pressure when they can be passed on to customers or squeeze profit margins when a commodity’s market selling price is too low to fully cover the added manufacturing costs. Business investment tends to be reduced until a later period when profit margins are stronger.”

BV: When determining where to build new plants (nationally or abroad), how much of a factor are electricity prices?

Harman: “The cost of power is a key factor in making such a decision, but also the availability and reliability of that power source need to be taken into consideration. Market demand and a company’s supply position to serve that market area need are more important in making such decisions … Above a certain cost point, electricity costs become a deal breaker for such investments.”

BV: Nationally, Indiana used to rank fifth lowest in electricity prices, now we’re somewhere around 27th lowest. What kind of an impact is that making when companies compare states to locate their new or expanding businesses?

Harman: “Clearly the higher cost of electricity in Indiana now as compared to just a few years ago is a disadvantage. Companies must also factor in projections for how the electricity costs will likely increase going forward as compared to other geographical regions, as there is a wide range for current power costs and power generation mix (nuclear, coal, natural gas, etc.) region to region. Indiana is heavily coal-fired generation and as such the costs to deal with tightened EPA emissions from these power plants has translated into higher power prices.”

BV: The SUFG released a recent forecast that predicted that prices will grow by over 30% over the next 20 years, while demand stays relatively flat. If companies have a hard time keeping up with costs now, what is the impact that an extra 30% will have over time?

Harman: “All companies are being forced to reduce the energy intensity of their businesses in order to offset what they can of the future electricity cost increases. Any cost increases that cannot be passed on through higher selling prices cause profit margin compression and reduce the financial health of a company. Companies are sensitive to customer demands that they must first do everything in their power to avoid any increases in costs before they try to seek cost recovery through price increases. …

Since 2006, ArcelorMittal USA has reduced energy costs by more than $163 million through focused improvements and energy management, making us the only steelmaker to be named an Energy Star® partner by the US EPA and participant in the US Department of Energy’s Better Plants Program.”

Read the full story.

Pollution Too High or are Standards Too Low?

The recent news that parts of five Indiana counties have been pushed out of attainment for ambient air quality and exceed a new U.S. Environmental Protection Agency (EPA) standard for sulfur dioxide comes as no shock.

Indeed, the U.S. EPA continues to lower the standards, making it increasingly difficult for communities to meet the new requirements.

U.S. EPA officials point to coal-fired power plants as the main contributors to the release of more sulfur dioxide than is permitted in the new standards. Sulfur dioxide is a colorless gas that contributes to acid rain that damages the environment and can worsen breathing problems.

Parts of Marion, Morgan, Daviess, Pike and Vigo counties are the ones that have now been pushed out of attainment. For a number of years, all 92 counties have met the necessary levels for ambient air quality standards. But the U.S. EPA has continued to tighten the belt on standards that measure carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter and sulfur dioxide.

Hoosier regulators now have 18 months to draft a plan telling how the counties will come back into compliance within five years.

So it sounds like Indiana’s air is just dirtier than ever, right?

Nope. In fact – it’s much cleaner than it’s ever been in our lifetimes. This 2011 BizVoice® story on the state of Indiana’s environment points to significant improvement in Hoosier air, water and land quality. But that’s hardly the story everyone hears.

For the story, I spoke with Dr. William Beranek Jr., president of the Indiana Environmental Institute, a third-party forum for analysis and understanding of Indiana’s environmental protection laws, rules and policies.

This is what he told me at the time: “We have been steadily and significantly improving across this timeframe (past 20 to 30 years), by sulfur dioxides, by nitrogen dioxide, by ozone, by lead and by particulates,” he explains.

“One of the challenges we’ve had across this time is that the technical community – for better or worse – has been steadily determining that some of those parameters are actually more harmful to human health than we had thought. Therefore, while we had been steadily improving the quality of the air, the indicator of whether we have good air has been steadily tightening. We’re at a point where we’re just as far from the finish line as we were when we started.”

Another expert on the matter: Bernie Paul, president of B Paul Consulting and former air quality expert for Eli Lilly & Company, also pointed to the federal process used for evaluating and changing air quality standards – starting with the Clean Air Act of 1970. That legislation was written so that all standards are re-evaluated every five years, and that cost implications cannot be taken into consideration when creating air quality standards.

“For a public agency to have to re-evaluate technical information every five years, when it takes 10 years to execute the plans to bring the air quality level down to where they set it, that’s a broken process,” he insists.

“A 10-year or even a 20-year review cycle would make more sense, because it takes so long for all of the implementation to be executed. We really can’t have a system where you’re constantly churning the standard.”

How does this relate to you? If coal-fired power plants are pointed to as the problem with these new regulations and the only way to match the requirements is to add more emission controls (or phase out coal altogether, as some would suggest), that means your electricity rates will go up.

Organizations including the U.S. Energy Information Association (EIA) and the Natural Resources Defense Council (NRDC) provide estimates between 83% and 95% of Indiana’s electricity coming from coal-fired power plants. It affects jobs here too: the EIA ranks Indiana as eighth in coal production in the country.

These are just some things to keep in mind the next time you read a story about Indiana’s “dirty” air.

Don’t Let National Ceiling Fan Day Blow By Without Realizing its Importance

While many homes have ceiling fans, its possible homeowners don't often think about their importance. Our friends at Fanimation in Zionsville are hosting a party on August 17 to celebrate ceiling fan awareness, and have passed along some critical facts you should consider when it comes to keeping your home cool:

On August 17, 2013, Fanimation is hosting an awareness party to promote the first annual National Ceiling Fan Day to be held on September 18, 2013. The purpose of the day is to educate the American public about the benefits of ceiling fan usage. Studies published by the Environmental Protection Agency (EPA) recommend using ceiling fans to reduce or eliminate the need to use air conditioning because ceiling fans consume far less electricity. Many Fanimation ceiling fans consume 30-50 watts during operation while air conditioning systems can use upwards of 5,000 watts. If every American turned off their air conditioning for one day and utilized fans for their cooling needs, the United States would save over three trillion kilowatt hours of energy consumption…

The National Ceiling Fan Day Awareness Party is a free event held at Fanimation’s headquarters and is open to the public. Fanimation has organized fun activities for all ages. There will be live music, prizes, vintage cars and bicycles on display, free food catered by Dashboard Diner, a caricaturist and a Kids Zone with bicycle helmet fittings, energy awareness activities and face painting. Attendees are also welcome to tour Fanimation’s antique fan museum located on site. The party will be held from 11 a.m. to 2 p.m. at 10983 Bennett Pkwy Zionsville, IN 46077.

President of Fanimation, Nathan Frampton says, “Fanimation hopes to inspire the public to turn down their air conditioners and turn on their fans. They will notice immediate impacts on their electricity bills and they will also help the environment.” He adds, “We as a society have grown dependent on air conditioners, we use them in our cars and then continue relying on them at home.  America’s increased reliance on central air and the escalating cost of energy inspired Fanimation to initiate the first annual National Ceiling Fan Day on September 18, 2013.”

Also, here are some key facts to keep in mind:

  • 94 million of the 113.6 million residential homes in the United States use air conditioning equipment and 110.1 million use space heating equipment.* Studies published by the Environmental Protection Agency (EPA) recommend using ceiling fans to reduce or eliminate the need to use air conditioning because ceiling fans consume significantly less electricity.
  • If every American turned off their air conditioning for one day and utilized only ceiling, floor, desk or wall fans the U.S. would save over three trillion kilowatt hours of energy consumption!
  • Energy consumption (data published by General Electric)
    Electric furnace: 17,221 watts
    Central air: 5,000 watts
    Ceiling fan: 30 watts
  • Monthly Energy Cost (based on 15 cents/kilowatt hour)
    Electric furnace @ 5 hrs/day: $392.85
    Central air @ 5 hrs/day: $114.06
    Ceiling fan @ 24 hrs/day: $3.30

For more information on ceiling fans or if you're interested in purchasing one, contact Fanimation business development manager Teal Cracraft at teal@fanimation.com.