Cost of EPA compliance staggering

September 28, 2011

From the time the Environmental Protection Agency started talking about its proposed Transport Rule (as we knew it then), energy experts have projected that the cost impacts for power providers would be substantial.

Now that the Cross-State Air Pollution Rule is ready for rollout, we’re seeing just how staggering those increases could be. If American Electric Power’s projections of 30 percent rate increases didn’t catch your attention, some estimates that were recently shared with Wabash Valley’s board will.

Vice President Power Production Keith Thompson presented the initial estimates for improvements to comply with the Cross-State Rule and other new mandates at Gibson Unit 5. Wabash Valley owns 25 percent of the unit.

The total cost of improvements to the unit will be $587 million over the next four years, making Wabash Valley’s share $147 million.  The biggest contributors to the total are improvements to the baghouse and injection systems, at an estimated $264 million, and upgrades to the scrubber, for $298 million.

Keep in mind that those are the costs for just one unit at just one power plant. Consider the number of plants that will be affected across the U.S., and the scope is truly staggering. Also keep in mind that most power producers will have little choice but to pass those costs along to ratepayers.

If your co-op isn’t already taking steps to inform members about the cost of today’s new environmental rules, you may want to begin soon. It’s only a matter of time before those predicted increases start to show up on their electric bills.