In a January op-ed piece that ran in The Anniston Star and The Opelika-Auburn News, Public Service Commissioner Twinkle Cavanaugh says she was “angered to find that consumers are being forced to pay billions of additional dollars for electricity simply because of laws and regulations passed by Congress or imposed by the Environmental Protection Agency.” Cavanaugh goes on to say that much of this regulation is based on “the medicine-show tonic of global warming,” accuses Northeastern congressmen of pushing cap-and-trade legislation in an attempt to “drain jobs from our region” and insists that the EPA is preparing to implement cap-and-trade by a back-door approach, which could boost your power bill by as much as 30 to 40 percent.
Summary: According to Alabama Power, the average customer pays $159 per year to offset the cost of compliance with environmental regulations. That figure includes every major environmental regulation since the 1970 Clean Air Act. The numbers do add up to billions –- over multiple years –- and they amount to about 8.5 percent of the average power bill, according to Alabama Power.
Cavanaugh didn’t provide data to support many of the other claims in her opinion piece.
Analysis: Public Service Commissioner Twinkle Cavanaugh says she attended a December presentation by Alabama Power at the PSC’s Montgomery offices. The power company outlined its costs for compliance with EPA regulations.
Cavanaugh, whose job is to regulate Alabama Power and other electrical suppliers, was upset by what she heard.
“I literally got so incensed by what was going on, I wrote something that was maybe 10 or 12 pages handwritten,” she said. Cavanaugh said she later whittled the piece down to the op-ed that ran in The Star and other papers.
“We were being given all these facts about costs, and figures about costs, that we are incurring,” she said. “And I say ‘we’ because the power company is a business and the costs are passed on straight to the consumer.”
But it’s hard to get a clear answer from Cavanaugh about what those costs are. When Bama Fact Check pressed her for data to support her “billions of dollars” claim, she said she got her numbers from the Alabama Power presentation. Asked for documentation, she e-mailed us memo from PSC staff summarizing the presentation by Alabama Power.
There are a number of claims in Cavanaugh’s editorial. Let’s take them one by one:
Does environmental regulation cost power customers billions?
Truth Rating: 3 out of 5
According to the PSC memo, the state’s largest power company pays $411 million per year to pay for compliance with environmental regulations. That includes compliance with every major environmental act since the Clean Air Act, 41 years ago -– including efforts to scrub basic pollutants such as mercury, lead and ozone out of plant emissions. Alabama Power officials say large customers -– cities, businesses and factories –- pick up 52 percent of the cost, and residential customers pick up the rest. The cost to the average residential customer is $159 per year or about $13 per month.
There are 2.18 million housing units in Alabama, according to the U.S. Census Bureau. If every house were charged at the rate quoted in the memo on Alabama Power (not all residents are Alabama Power customers), the total cost to residential customers, for environmental compliance, would be about $346 million.
So the cost does seem to be in billions -- over time, if you include all environmental regulation and if you accept the power company’s numbers, as Cavanaugh does.
The “medicine-show tonic” of global warming.
Truth Rating: 1 out of 5
“Actually, the official scientific opinion on climate change is that there isn’t an official scientific opinion,” said Jason Senkbeil, director of the Environmental Science Program at the University of Alabama.
“I can’t say what the consensus is, because there isn’t a consensus,” said Senkbeil, who teaches climatology courses at Alabama. “But it’s safe to say that the majority opinion of people who have studied the topic is that climate change is occurring, and that it is connected to human actions.”
Senkbeil said the best place to get an overview of the prevailing scientific opinion is the Intergovernmental Panel on Climate Change, a multinational group of scientists studying the phenomenon.
The panel’s most recent round of reports (available at the panel's website) say that “warming of the climate system is unequivocal,” and that human influences have “very likely” changed sea levels, “likely” increased temperature extremes, and human-caused warming has “likely” created global changes in biological systems.
Senkbeil doesn’t like the term “global warming” because, he said, what’s going on is more complex that just warming of average temperatures. He said that while human-caused climate change is the predominant theory among scientists in much of the world, there are pockets of strong resistance, particularly in Russia and the Southeastern U.S.
Twinkle Cavanaugh has a degree in science, but she’s not a climate scientist, and stacked up against the IPCC’s expertise, her claims don’t seem all that sound.
Cap-and-trade, the Yankee conspiracy.
Truth Rating: 1 out of 5
It’s true that cap-and-trade legislation, which was defeated last year, was supported by a majority of legislators in Northeastern states, and opposed by a majority of Southern legislators. But Cavanaugh has no evidence to support her claim that Northerners are supporting cap-and-trade “in an attempt to reverse our (the Southeast’s) economic development successes and drain jobs from our region.”
Cavanaugh reiterated the idea in a later interview, saying that Washington is “trying to be punitive to the Southeast.” But she didn’t offer any evidence of this intent –- no policy statements, no quotes from congressmen.
It would indeed be remarkable if legislators –- even legislators with funny accents –- intentionally tried to kill the economy in an entire region of the country, and Cavanaugh offers no remarkable proof. No proof at all, actually.
Is the EPA going through the back door to create cap-and-trade?
Truth Rating: 1 out of 5
In her op-ed, Cavanaugh says “cap-and-trade is all but dead, so the EPA is moving to implement similar policies through regulations and mandates. This theme – that the feds will make cap-and-trade happen by other means – has become a talking point for a number of conservative pundits lately. It’s a bit of a stretch.
Cap-and-trade is a system under which limits are placed on greenhouse gases emitted by industries. Those industries can then buy carbon credits – essentially, rights to emit more pollution – from industries that came in under their limit, or from organizations that do things to offset carbon emissions.
Asked what EPA regulations act in a similar way, Cavanaugh referred us to the memo on the Alabama Power presentation. Asked for more detail, Alabama Power didn’t comment directly on Cavanaugh’s cap-and-trade comment, but did list a number of upcoming regulations that concerned them, including new rules on disposal of hazardous coal ash, and something called the Clean Air Transport Rule.
The Transport Rule is a proposed EPA regulation that would place deep cuts on allowable pollution emissions from industries in most states east of the Mississippi. The rule is designed to regulate pollution emissions that across state lines -– in other words, to keep Alabama factories from polluting Georgia air, or Mississippi from polluting Alabama. Critics have claimed that the Transport Rule is similar to cap-and-trade in that it proposes to regulate emissions, with possibly costly effects for industry.
But the rule doesn’t set up a carbon trading system, a crucial element of cap-and-trade.
The Obama administration may have no choice but to implement the rule -- because in 2008, a federal court struck down the Clean Air Interstate Rule, the Bush administration's approach to regulating emissions of ozone and other pollutants traditionally regulated by the EPA. That left the Obama administration with the task of replacing the rule. The court did not set a deadline for creating a new rule, but did state that the creation of a new rule could not be put off indefinitely.
We have enough coal to last 200 years.
Truth Rating: 5 out of 5
Cavanaugh is right, according to the U.S. Department of Energy. A report from the DOE’s Energy Information Administration shows that we have enough coal to last 234 years – if we keep using coal at our current rate of consumption. If you know America’s economy, you know that’s a big if. If the consumption keeps growing at projected rates, DOE data indicates, you can cut about 90 years off that figure.
EPA regulations will raise the cost of power by 30 to 40 percent.
Truth Rating: 1 out of 5
In the op-ed, Cavanaugh says proposed new environmental regulations will raise the cost of generating power by 30 to 40 percent, and that power companies would pass that cost on to their customer
Again, when asked for evidence, Cavanaugh again said she based the statement on things she heard in the Alabama Power presentation.
But the PSC memo doesn’t support that. It states that the power company expects its environmental costs to go up by $7 million -– less than 2 percent –- in 2011. That’s less than 2 percent of the cost of environmental compliance, not 2 percent of the total cost of generating power.
When asked what regulations could increase the cost of generating power by 30 to 40 percent, Alabama Power representatives responded by forwarding a list of regulations the company said would “adversely impact” their customers. Again the list included air standards, ash disposal rules, and most of all, the Clean Air Transport Rule.
The Transport Rule could indeed be costly to implement. Depending on where you look, you’ll find nationwide cost estimates ranging from $3 billion per year to $200 billion over a five-year period.
The EPA projects that the rule will add 1.5 percent to the average power bill.
Twinkle the PSC veteran
Truth Rating: 5 out of 5
In her editorial, Cavanaugh makes the seemingly odd claim that she had already served on the Public Service Commission for two months. That sounded strange, given that the article ran Jan. 7 –- ten days before Cavanaugh’s swearing-in on the Capitol steps.
Well, it’s true. Commissioners take office as soon as they are elected in November, and the swearing-in on Inauguration Day is all for show. Cavanaugh said she doesn’t understand why it's that way.
“It’s pretty useless,” she said. “But I guess it’s the best photo op money can buy.”