Clean Power Plan Will Hurt California’s Most Vulnerable – Pacific Research Institute

Clean Power Plan Will Hurt California’s Most Vulnerable

California’s relatively mild climate means that, on average, our electricity bills are a smaller portion of our incomes relative to the rest of the country. But that doesn’t protect us from the increased costs of President Obama’s Clean Power Plan, a federal effort to cut emissions. Nor does it mean that there isn’t a troubling power bill inequality problem across the state.

Two years ago, before the Clean Power Plan was implemented by the Environmental Protection Agency, then temporarily blocked by the Supreme Court, electricity was a relative bargain in the Golden State. “The Clean Power Plan’s Economic Impact,” a new Pacific Research Institute report, says that the average California household paid $1,083 for a year of electricity in 2014. That was 1.79 percent of the state’s 2014 median household income of $60,487. In only three states — Utah, Colorado and Minnesota — was the portion lower. Mississippians paid the largest percentage of their incomes for electricity — 4.8 percent.

Within California there was a gap, too, and it’s the poor who feel the disparity the most. The lowest burden is found in parts of San Mateo County, where it’s 0.59 percent of median incomes of at least $250,000 a year. The highest percentage is in pockets of San Luis Obispo County, where average annual electricity expenditures would equal 15.87 percent of median incomes of at least $4,607.

In some cases, stark inequalities exist between neighborhoods. The burden for many residents in affluent Palos Verdes is less than 1 percent, and it’s less than 1.4 percent across nearly the entire peninsula. At the same time in a community just two miles to the east that isn’t as wealthy, the residents’ burden is 3 to 5 percent.

Obviously, the poorest are already hurting. But under the Clean Power Plan, they’ll be hurt even more — and they will be joined by others as the financial strain of higher power bills trickles upward.

“Energy poverty, a term once reserved for developing nations, now threatens far too many families in the United States,” says the PRI report, that also cites a 2011 survey in which 52 percent of respondents said their electricity bills were harder to pay than the year before. Three years later, the number of households receiving federal energy assistance had increased 40 percent over the years preceding the Great Recession.

If a lower court rules in favor of the plan — a judgment is pending in the U.S. Court of Appeals for the District of Columbia — then the problems will only get worse.

Consider, for instance, those same California regions mentioned above. Under the Clean Power Plan, the power bill burden in those San Mateo County areas where it is lowest in the state will climb from 0.59 percent of the median income to 0.64 percent. To use a well-worn but descriptive Washington term, that doesn’t even amount to a rounding error.

But in San Luis Obispo County, where the burden is the state’s highest, the difference won’t go unnoticed. Average annual electricity expenditures will rise from 15.87 percent to 17.36 percent of income.

The pain will be particularly sharp in Kern and Riverside counties. If Obama’s plan clears its legal hurdle, residents in the former will see their yearly electricity bills jump 8.9 percent, and in the latter 9 percent.

Meanwhile, the average California household will pay about $1,200 a year for electricity, up from $1,083 just two years ago.

The Clean Power Plan’s future is in doubt following the election of Donald Trump as president. I would encourage the President-elect to look closely at the results of this study and work instead to take whatever steps possible to stop the Clean Power Plan.

The plan is also mired in the judicial system because 27 states filed a petition to block an executive action not approved by Congress. California was not among them.

In fact, California is part of a group of states trying to derail the challenge. It also continues to plan for the scheme’s implementation with apparently no thought of how it would thin wallets and slow economic growth, which are the unavoidable results of the state’s current big government approach to addressing emissions.

Richer Californians will feel nothing under Obama’s plan. But the most vulnerable will. The strain of energy poverty will only grow worse for them.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top