Clean Power Plan Would Trap More People In Poverty

Clean Power Plan Would Trap More People In Poverty

More and more West Virginians are living in energy poverty today.

If you spend more than 10 percent of your income on electricity, natural gas, and other household energy costs, then you are afflicted by energy poverty. It is a tragedy that forces some families to choose between keeping the lights on or putting food on the table because they cannot afford both.

Hard-working families need relief from rising energy costs. According to a 2011 survey, 52 percent of respondents said they were having a more difficult time affording their energy bills compared to the prior year. Forcing these families to pay even more out of pocket every month for their power bills will only worsen this situation.

U.S. Sen. Joe Manchin of West Virginia has said that, “the diversity of our energy mix is one of the reasons America enjoys affordable and reliable electricity.” He noted that, “competition not only keeps prices low; it also stimulates innovation, encourages economic growth and creates good-paying jobs across this great country.” He’s right.

Unfortunately, policies coming out of Washington, D.C., like the so-called Clean Power Plan would do just the opposite. Its aim is to reduce greenhouse gas emissions generated by power plants. Several states, including West Virginia, have sued the federal government, arguing that the administration did not have the power to implement the plan absent an act of Congress. Right now, the proposal is on hold as it is being reviewed in federal court. The Clean Power Plan’s future is also in question now that Donald Trump has been elected president.

How would the Clean Power Plan affect your electricity bill? I recently authored a new study with the Pacific Research Institute called “The Clean Power Plan’s Economic Impact.” It explores how the new government mandates in the Clean Power Plan would impact household electricity costs, and the power bills of all Mountain State residents. You can read the study – and view an interactive map to see what it will mean for West Virginians – at www.pacificresearch.org.

My research found that families in West Virginia’s poorest neighborhoods in Huntington and Cabell County could see average annual electricity costs equal to 14.17 percent of their income once the Clean Power Plan is fully implemented. In Charleston and Kanawha County, energy costs could go up by 22.9 percent. On average, Mountain State residents could soon find themselves paying roughly $1,680 a year for electricity.

We should not be surprised by the study’s results. The Clean Power Plan is another example of a big government program from Washington, D.C., that, despite its intentions, creates unintended consequences that overwhelm any potential benefits.

West Virginia residents and millions of others could soon endure a harsh economic reality for a program that won’t meaningfully reduce emissions or improve the environment.

Perhaps the biggest concern about programs like the Clean Power Plan is that they will trap more people in a life of poverty.

The federal government provides financial assistance to help the poor afford the high costs of energy. And, more and more people need the help these energy assistance programs offer due to the growing affordability problem. As evidence of this, the number of U.S. households receiving energy assistance from the government was 40 percent higher in 2014 than before the Great Recession.

The poverty trap ensnares families because rising incomes threaten their eligibility for assistance programs. Ironically, poor families may find that they are better off financially if they do not try to work their way up the economic ladder in favor of remaining eligible for their current energy subsidies.

The bottom line is that West Virginia’s poor and middle-class households simply cannot afford the high costs that the Clean Power Plan would impose on the economy.

I would encourage President-elect Trump to look closely at the results of this study and work instead to take whatever steps possible to stop the Clean Power Plan.

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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.