EPA Action Is a Tax on Michigan Power Plants and Customers

The Obama administration’s announcement this week that EPA is going to regulate CO2 emissions from industrial facilities and power plants for the first time by requiring those plants to obtain a permit under the Clean Air Act is bad news for Michigan. The EPA’s action amounts to a new tax on Michigan business and families, which will lead to the loss of more jobs in the state which already is suffering from a 15.2 percent unemployment rate — highest in the nation.

Michigan’s economy is particularly vulnerable to the new regulations because of its reliance on manufacturing and the fact that many of the state’s power plants are old and in need of modifications to meet stricter environmental standards that will require a permit under the new proposed regulations. Michigan businesses and power plants that emit more than 25,000 tons per year of CO2 would be required to demonstrate they are utilizing “best available control technology” before they could receive a permit. Power plants and industrial facilities are required to meet a moving target that the EPA is free to define however it wants. The EPA may decide, for example, that carbon sequestration is required by coal fired power plants to meet their definition of “best available control technology.” That would force utilities to replace coal with more costly fuel sources such as natural gas, substantially increasing the cost of electricity. These price increases would of course be passed on to Michigan consumers in the form of increased energy bills. Michigan manufactures will also be faced with an extensive increase in regulatory requirements, making them more uncompetitive and destroying more jobs.

Attorney General Mike Cox should file a lawsuit challenging the legality of the EPA circumventing Congress with these draconian proposed rules on regulating CO2. National business groups including the National Association of Manufactures and the U.S. Chamber of Commerce have already threatened lawsuits over the proposed EPA action. Michigan leaders cannot afford to stand by idly as the federal government drives another stake through the heart of the state’s economy.

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