New name, but still ‘cap and trade’

Remember cap and trade? It’s back, but under a different name. President Obama’s Environmental Protection Agency (EPA) is seeking to fundamentally change how electricity is generated, distributed and consumed in the United States. At the beginning of August, the administration announced a final rule to regulate carbon dioxide (CO2) from existing power plants — referred to as the Clean Power Plan. Let’s be honest, this rule is nothing but an attempt to implement a backdoor cap-and-trade system. This administration was unsuccessful in getting cap and trade through Congress at the beginning of President Obama’s term and has now imposed a cap-and-trade scheme by regulatory fiat. This cap-and-trade gambit would significantly change the existing energy mix in the United States, which to date has been the responsibility of states, not the federal government.

The administration’s final rule, which clocks in at a mere 1,560 pages, requires states to submit plans to the EPA to comply with new CO2 mandatory “goals” set by the agency for their electricity sector. A proposed “Federal Plan” that would impose a regulatory cap-and-trade program on states that fail to submit satisfactory plans accompanies the rule as well. The final rule unquestionably signals that the EPA’s preference is for states to adopt state, regional or national cap-and-trade programs to comply with the new federal mandates — an approach that was rejected by Congress and the American public just a few years ago.


The American people lose under the EPA’s cap-and-trade regulations. According to the American Coalition for Clean Coal Electricity, the energy price increases associated with the final rule will “devastate the 59 million low-and-middle-income Americans who already spend 17 percent of their budget on energy.” This rule comes at a time when U.S. household incomes remain stagnant and the economy remains mired by sluggish economic growth. In my home state of Kentucky, the EPA’s regulations are projected to increase electricity rates by 12 percent and disproportionally impact the 954,000 lower-income and middle class families across the state — this is unacceptable.

The administration’s plan threatens our grid reliability as well. According to the U.S. Energy Information Administration, coal accounted for 39 percent of our electricity generation in 2014, natural gas accounted for 27 percent and nuclear power accounted for 19 percent. Cumulatively, these three power sources generated 85 percent of our electricity in 2014, and, ironically, these are the three sources of energy that are consistently in the crosshairs of this administration’s war against American energy. How does the administration plan on powering the country when it’s actively working against American energy?

Moreover, there will be winners and losers among the states. A recent analysis concludes that the states that will benefit most under the EPA’s cap-and-trade regulations are primarily from the West Coast and the Northeast, while the vast majority of states across the country will likely need to reduce their emissions rates or purchase credits from these West Coast and Northeast states to comply. Take a closer look and it is Republican districts that will be hit the hardest. 87 percent of GOP congressional districts stand to lose under President Obama’s plan.

We cannot, and will not, sit idly by while the EPA wages its war on affordable American energy and ratepayers. The Energy and Commerce Committee remains committed to protecting ratepayers across the country from the increased costs of electricity that the EPA’s cap-and-trade plan will surely inflict on our country. In June, the House passed H.R. 2042, the Ratepayer Protection Act, a bill that I sponsored, by a bipartisan vote of 247-180. H.R. 2042 would protect families and businesses from significant electricity rate increases or reduced electricity reliability that may result from the EPA’s regulations for existing power plants. It’s a common-sense bill, yet the administration has threatened to veto it.

While Obama believes that climate change is the No. 1 issue facing mankind, Americans disagree and cannot afford his proposed solution. Most people in America today are more interested in a good job, growing our economy and providing for their families. We have to recognize the economic realities and the crippling impact of regulations like the Clean Power Plan. The Energy and Power Subcommittee, which I chair, will continue to examine and assess the legality and unworkability of this unprecedented rule being placed on the backs of the hard-working American people and businesses through continued oversight and hearings.

Our great nation has abundant energy resources, and we should not be inhibiting our ability to provide low-cost, reliable electricity to the American people. It’s past time for the EPA to drop cap and trade once and for all and embrace our energy abundance and say yes to American energy. 

Whitfield has represented Kentucky’s 1st Congressional District since 1995. He sits on the Energy and Commerce Committee and is chairman of the Subcommittee on Energy and Power.