NCPA - National Center for Policy Analysis

Texas May Face Electricity Shortages under New EPA Rules

April 7, 2011

Texas is now the nation's leading industrial and manufacturing state.  Thus, the state will be disproportionately impacted by the recent Environmental Protection Agency's (EPA) greenhouse gas (GHG) regulation and the many other major rules to take effect in the next three years.  Indeed, the rules on track to go into effect in the next three years could cost more than $1 trillion, result in hundreds of thousands of jobs lost and significantly impair electric reliability, says Kathleen Hertnett White, director of the Armstrong Center for Energy and Environment.

The 10 EPA rules examined by White are: 1) GHG regulation; 2) National Ambient Air Quality Standards (NAAQS) for four criteria pollutants; 3) Ozone NAAQS; 4) Particulate Matter NAAQS; 5) Clean Air Transport Rule; 6) Cooling Water Intake; 7) Coal Combustion Residuals; 8) Utility Maximum Achievable Control Technology Standards (MACT); 9) Industrial Boiler MACT; and 10) Portland Cement Kiln MACT.

  • These regulations involve compliance costs of a magnitude never experienced previously but without rigorous scientific justification or clear health benefits.
  • Many of the rules in question are aimed at electric generation and are particularly threatening to coal-fired generation.
  • A National Electric Reliability Council (NERC) study estimated that four EPA rules risk 5,775 megawatts of existing capacity in Texas.
  • The Electric Reliability Council of Texas (ERCOT) projects Texas needs 18,000 megawatts of additional capacity to avoid shortfalls in 2020.

If NERC's projections for ERCOT are accurate, Texas may face the daunting challenge of adding 23,775 megawatts of electric generation within the ERCOT region by 2020, says White.

Source: Kathleen Hertnett White, "EPA's GHG and Clean Air Act Regulations: A focus on Texas' Economy, Energy Prices, and Jobs," Texas Public Policy Foundation, March 24, 2011.

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