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Governor Kasich and Attorney General DeWine fight Obama EPA overreach

Greg R. Lawson Sep 17, 2015

On August 28, 2015, Governor Kasich asked President Obama to delay the U.S. EPA’s Clean Power Plan that will surely cripple Ohio’s economy. Mr. Kasich’s letter to the White House followed Ohio Attorney General Mike DeWine’s decision to join with 15 states challenging the Clean Power Plan in federal court. We applaud Mr. Kasich and Mr. DeWine for these efforts to save Ohio jobs and resist yet another Washington power grab.

Touted as a blueprint to save the world from “climate change,” the Obama Administration’s Clean Power Plan threatens all Ohioans with higher energy bills, corporate downsizing and layoffs, and a frontal assault on Ohio’s rightful role in regulating her electricity market.

Ohioans face higher energy bills across the board if the Clean Power Plan is implemented. The Buckeye Institute’s Joe Nichols has explained: “An economic analysis found that the Clean Power Plan could cost up to $348 billion from 2017-2031 (present value, inflation-adjusted 2013 dollars). Ohioans could see double-digit electricity price increases, which would hurt low and fixed income citizens the most.”

Higher energy bills pose a significant risk to Ohio’s economic recovery. The Buckeye Institute has expressed this fear on multiple occasions, including during the U.S. EPA’s deliberations on the final rule. Sharing this concern, Ohio EPA Director Craig Butler has warned that “Access to reliable, abundant and low-cost electricity is the backbone of Ohio’s robust economy.” Forcing affordable power offline and igniting double-digit price hikes could sever that backbone and paralyze the state’s economy.

Clean Power Plan advocates like to trumpet “green job” growth as a fringe benefit of the Plan. Those purported gains, however, rarely account for the jobs and wages lost due to the significantly higher energy costs that the Plan imposes. These lost jobs and earnings will be more difficult to see and quantify, but no less real. Nineteenth century economic theorist, Frederic Bastiat, famously explained this phenomena of “seen and unseen” consequences, observing that although obvious gains to politically-favored parties may be easy to spot, the non-obvious losses to everyone else are more difficult to discern but just as consequential.

An even more fundamental, structural consequence of the new Plan includes the bold expansion of federal power into the state’s regulatory domain. The Clean Power Plan is yet another shining example of bureaucratic micromanagement from Washington.

The Ohio Public Utilities Commission has had sole jurisdiction over the state’s electricity retail market since 1911—almost six decades before the EPA was a twinkle in Richard Nixon’s eye. A state-based regulatory structure recognizes the value of local knowledge and control, and the inherent inefficiencies of one-size-fits-all regulation.

The Federal Power Act of 1935 explicitly stipulates that the federal government’s jurisdiction in these markets shall “extend only to those matters which are not subject to regulation by the States.” The Clean Power Plan ignores this jurisdictional “bright line” between state and federal governments, and instead usurps power over electricity markets that has long been reserved for Ohio and her sister states. This blatant power grab, as our Rea Hederman recently explained, comprises the core of the multi-state litigation that Ohio has wisely joined.

For all of its costs and potential for economic and constitutional harm, even the Obama Administration admits that the Clean Power Plan “won’t save the world.” Despite its draconian effects, the Plan’s net benefits to the climate are negligible at best, making it even more important that Mr. Kasich and Mr. DeWine continue to stand up for Ohio and fight for her economy.