Enjoy this season’s Christmas lights; next Christmas it will be considerably more expensive to run the lights that adorn Christmas trees, homes and businesses in many areas around the country, including Michigan.

Most American households would have preferred a lump of coal in their stocking from the Environmental Protection Agency rather than the Maximum Achievable Control Technology (MACT) rule issued by the agency today. The rule is aimed at coal-fired power plants, mandating among other things a 90 percent reduction in mercury emissions. This may be the most expensive regulation on utilities issued by the EPA to date, estimated to cost utilities around 11 billion dollars per year.

Utility companies around the country are already reacting to the EPA's Christmas present by announcing the shuttering of 72 power plants around the country, including several in Michigan, as well as filing for rate increases running into the double digits.

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No, Virginia, wind power will not replace coal in the generation of electricity as it is too expensive and unreliable. Natural gas is far more likely to replace the lost coal-fired plants. Fortunately, natural gas prices are currently low, but it bears a recent history of large fluctuations in price.

Natural gas is also the preferred heating fuel for homes in most areas of the U.S. However, utilizing it will require vast quantities of the fuel, which is likely to have an escalating effect on future prices.

Perhaps in the end the Grinch could not steal Christmas, but the EPA is trying its best.


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