Columbus, OH – As American Electric Power and other energy companies prepare to implement significant rate hikes, new research released by The Buckeye Institute modeled the impact that a new Clean Power Plan—which the Biden Administration is attempting to revive through the regulatory process—would have on jobs, the economy, and customers. 

In The Economic Impact of a Potential New Clean Power Plan on Ohio and California, researchers with Buckeye’s Economic Research Center (ERC)—using power usage data from government agencies in Ohio and California—found that customers in Ohio would see an increase of $810 on their electric bills per year and that customers in California would see an increase of $665 annually.  

“With customers already getting hit with rising energy costs, imposing a new Clean Power Plan will make a difficult situation even worse and will have significant, negative economic consequences on households, businesses, and the economy,” said Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute. “With customer rate hikes on the horizon and inflation high, it is time once and for all to pull the plug on federal government mandates that drive up energy costs.”

With their robust economies, diverse geographies, and mixed population densities, researchers with the ERC looked at California and Ohio to illustrate how a new Clean Power Plan would affect most of the country. Using a dynamic scoring model developed by economists with the ERC, the report’s authors analyzed four scenarios to estimate the impact of a new Clean Power Plan—which would be necessary to achieve President Biden’s call to reduce carbon emissions 52 percent below 2005 levels—would have on jobs and the economies of Ohio and California.

Scenario One: Impact of New Clean Power Plan on Ohio at a Seven Percent Discount Rate by 2032 

• Lose 10,000 jobs;
• Gross domestic product falls $3.19 billion;
• Consumption declines $550 million;
• Investment drops $1.99 billion; and
• Tax revenue declines $2.51 billion.

Scenario Two: Impact of New Clean Power Plan on Ohio at a Three Percent Discount Rate by 2032 

• Lose 14,000 jobs;
• Gross domestic product falls $4.34 billion;
• Consumption declines $750 million;
• Investment drops $2.7 billion; and
• Tax revenue declines $3.38 billion.

Scenario Three: Impact of New Clean Power Plan on California at a Seven Percent Discount Rate by 2032 

• Lose 10,000 jobs;
• Gross domestic product falls $5.11 billion;
• Consumption declines $1.87 billion;
• Investment drops $3.1 billion; and
• Tax revenue declines $1.87 billion.

Scenario Four: Impact of New Clean Power Plan on California at a Three Percent Discount Rate by 2032 

• Lose 13,000 jobs;
• Gross domestic product falls $6.84 billion;
• Consumption declines $2.5 billion;
• Investment drops $4.14 billion; and
• Tax revenue declines $2.34 billion.

“California and Ohio both fare poorly under a new Clean Power Plan, and the rest of the country will not fare any better,” Hederman continued.

The Economic Research Center’s model has undergone a double-blind peer review consistent with academic standards and methodologies. The full technical description provided in the report’s appendices allows researchers to validate the model’s accuracy and the conclusions drawn.

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