May 29, 2015

IE Questions: Will My Electricity Bill Go Up Under The Clean Power Plan?

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epa drawing final

You’ve heard the ominous predictions: electricity rates will soar, skyrocket, or just plain increase under the Clean Power Plan, President Obama’s 2014 proposal to cut carbon dioxide emissions from power plants.

But is it true?

Mostly yes, but how much they rise depends on where you live, according to a new analysis of the plan by the Energy Information Administration.


epa drawing final

In the short-term the answer is yes. EIA predicts that electricity rates will rise most in the early 2020s, about two to five percent more under the Clean Power Plan than what they would’ve been otherwise. This is mostly due to utilities building new natural gas-fired power plants and the jump in gas prices that’s expected to happen once demand for it increases.

By 2030, it’s mixed. In places like the Southeast, the Southwest and the Southern Plains, electricity prices will stay higher than they would’ve been without the plan. In other places, like New England and the Northeast, they’ll be lower. In general, EIA expects price increases to stabilize as lower-cost renewable power comes online and replaces natural gas.

By 2040, the gap between electricity rates under the Clean Power Plan and what rates would’ve been without the plan begins to narrow even further as energy efficiency investments brought about by the plan help reduce demand. Some areas, like the Central Plains, Northwest and Great Lakes region, may even see lower bills than they would’ve had the Plan never been passed.

The Environmental Protection Agency plans to finalize the Clean Power Plan by mid-summer. Fourteen states have sued the agency over the proposal.

What’s Next: The EIA’s analysis has a ton of information on how the Clean Power Plan will change energy in America. Want to know which coal-producing regions will be most affected? Which parts of the country will likely reduce their electricity consumption the most? Check it out!