For many businesses, the cost of energy is a significant expense. The Environmental Protection Agency's recent adoption of the Clean Power Plan—which many industry observers describe as the most significant environmental regulations in United States history—has only heightened the concern over energy costs. The Clean Power Plan is essentially an effort by the EPA to stem the implications of climate change and calls for a 32% reduction in carbon dioxide emissions from the power sector by 2030.1 The transition toward such reductions is scheduled to begin in 2022—only seven years from now. While much has been publicized regarding the detailed requirements of the Clean Power Plan since its adoption, it is equally if not more important for business owners and executives to understand how the Clean Power Plan will impact their businesses and what, if anything, they can or should be doing to most favorably position their businesses to deal with those likely implications. This Update summarizes some of the likely impacts that the Clean Power Plan will have to your business's bottom line, and identifies some important measures that you can undertake in order to mitigate those impacts and even turn them into advantages.
How will the Clean Power Plan impact your business? Read More
For states located in the Midwest, like Wisconsin, where roughly 62% of the electricity is generated from coal-fired plants, the impact of such regulations will likely be significant (some say dramatic) in terms of energy generation, cost and usage. At least one industry analysis predicts that in the absence of other cost-effective energy generation options costs of compliance with the Clean Power Plan could result in annual energy cost increases of 17%-30% per year beginning in 2022. Compare this with historical increases over the past 15 years which are more typically in the range of 4% per year. Not surprisingly, many businesses in competitive markets with tight margins will have difficulty absorbing those energy cost increases.