Fox News mischaracterized a new proposal to set emissions limits for existing power plants, suggesting that Environmental Protection Agency regulation would make electricity rates increase and likely draw the opposition of “carbon state Democrats.” In fact, the plan is expected to lead to lower power bills through improved energy efficiency, and allows states with carbon-intensive power to make cost-effective and realistic steps toward sustainable power.

Laying out a plan for President Obama to address climate change in his second term, the Natural Resources Defense Council (NRDC) released a proposal to regulate carbon emissions from existing power plants under the Clean Air Act using a flexible approach that can be tailored for each state and would minimize economic impacts. William Reilly, a former EPA administrator under President George H.W. Bush, stated of the plan: “This is an imaginative proposal that addresses some real needs. It deserves to be carefully analyzed and taken seriously by all the affected interests.”

But Fox News' America Live claimed that “this kind of proposal would obviously have huge economic impact that could spread across industries.” Fox News Digital Politics Editor Chris Stirewalt said that under any EPA regulation of existing power plants, Americans “may see their power bills go up and they may see scarcity down the road.” He offered that “there are enough carbon state Democrats” that could try to prevent the EPA from acting.

But EPA regulations could actually lower power bills. The NRDC proposal gives plant owners credit for energy efficiency increases, which, according to the analysis from a widely-used modeling firm, would lead to lower power bills. Grist's David Roberts explained:

The fact that energy efficiency counts as compliance is crucial to the economics of NRDC's proposal. If avoided carbon counts toward reducing average fleet emissions, then every utility, in every state and region, has access to inexpensive compliance measures. [...] Remember: Efficiency saves ratepayers money. According to modeling of the NRDC proposal done by ICF International, by complying through efficiency measures, utilities could achieve the proposed carbon standards while slightly reducing power bills. And every dollar not spent on power is a dollar of annual economic stimulus.

The NRDC report estimates that its approach could lower wholesale power prices by 4 percent in 2020, and that efficiency improvements would further reduce consumption, lowering power bills and emissions simultaneously.

Stirewalt's suggestion that “carbon state Democrats” would push back against any EPA regulation rings hollow too. The proposal cited minutes earlier explicitly advocates for state-specific carbon emission rate standards, meaning states that currently have a carbon-intensive fleet would have to meet less stringent emissions standards than ones that have a less carbon-intensive starting point. NRDC's plan is not cap-and-trade, as Fox suggested. The plan is to set individual emissions standards for each state, and then states can choose how best to curb their emissions including through cap-and-trade.

While America Live host Megyn Kelly did briefly cite the NRDC's estimate that an investment of $4 billion (in 2020) would lead to $25-60 billion in benefits by reducing the pollutants behind climate change and acid rain, it bears repeating: contrary to Stirewalt's suggestion, groups like NRDC don't advocate for utility emissions limits because it “hurts the coal industry.” They do it because they estimate the costs of coal far outweigh its benefits.

NRDC's plan would lower carbon emissions largely by improving energy efficiency and reducing our reliance on coal, leading to net benefits as this chart of the estimates shows: