Three Facts About Federal Regulations Likely to Impact Utah’s Energy Competiveness

On August 3, 2015, the White House announced the release of President Obama’s “Clean Power Plan.” 

The Environmental Protection Agency has proposed this rulemaking as a key component of the President’s Climate Action Plan, which identifies a wide range of actions that the administration is implementing to address the challenges of climate change.

This new regulation creates national standards for carbon pollution from existing power plants. The stated goal of this regulation is to reduce greenhouse gas emissions from the electrical power sector on a state-by-state basis. Its target is to reduce carbon dioxide emissions by 32 percent from year 2005 levels by the year 2030. Currently Utah is producing 1179 pounds of emissions per megawatt hour of electricity, and will require a 37 percent reduction.

Here are three facts from the broader Utah business community likely to be impacted by this new regulation:

  1. Coal Plays An Important Role to Utah’s Economy:Coal generated electricity represents nearly 80 percent of Utah’s total electricity. This represents jobs to Utah’s rural communities in coal mining and generation facilities. For example, according to the Governor’s Office of Energy Development, coal mining in the state accounted for $579 million of production in 2013 and supported nearly 3,000 jobs.

  2. Larger Shift Away from Coal: This isn't the only rule impacting electricity resource decisions. A number of new regulations, decisions by other state’s that purchase power from Utah and an abundance of natural gas are putting pressure on coal as an economically viable resource. Regulations covering mercury, coal ash, cross-state air pollution, regional haze, and greenhouse gases, among other things, could make it unmanageable to use one of our cheapest and most abundant fuels.

  3. Declining Affordability of Energy: Utah’s retail-electricity prices were ranked as the 10thlowest in the nation in 2014, which benefits every business and our economic development efforts. This especially true for recruitment of manufacturing, and data center facilities. The proposed rule will advance the shift away from low-cost coal generation and change our relative competitive advantage in electric prices.

Utah’s vast and diverse energy and mineral resources ensure access to reasonably priced energy while creating jobs, supporting rural economic development and providing a solid foundation for broader economic strength.

The Chamber has opposed any proposed federal regulation of greenhouse gases that transfers economic wealth from Utah to other states, as it causes economic hardship on businesses and consumers, and doesn’t allow for alternative means of compliance.

We are working with key stakeholders to carefully consider the direct and indirect costs that our state may incur from the Clean Power Plan and the state’s response to the rule.

To get involved or learn more contact: [email protected].