Federal climate regulations could put Florida businesses in a bind

By William Patrick | Florida Watchdog

TALLAHASSEE, Fla. — Federal energy regulations are putting the squeeze on manufacturers, an economic sector hit hard by globalization.

In Florida, 18,000 manufacturing businesses employ 311,000 workers to make products ranging from motor vehicles to plastics to tortillas, according to Enterprise Florida Inc., the state’s chief economic development agency.

But that could soon change for the worse, said Jay Timmons, CEO of the National Manufacturers Association.

On the heels of the U.S. Environmental Protection Agency’s new 645-page proposed rule aimed at reducing emissions from coal-fired power plants, Timmons is sounding an economic alarm.

“As users of one-third of the energy produced in the United States, manufacturers rely on secure and affordable energy to compete in a tough global economy, and recent gains are largely due to the abundance of energy we now enjoy,” Timmons said.

“(Monday’s) proposal from the EPA could singlehandedly eliminate this competitive advantage by removing reliable and abundant sources of energy from our nation’s energy mix.”

While the EPA is taking center stage in the Obama administration’s regulatory climate change agenda, it’s not alone.

Many products made by manufacturing companies also use electricity. From home appliances to commercial and industrial equipment, these products are regulated by different federal agencies like the U.S. Department of Energy.

Using its authority under the Energy Policy and Conservation Act, the DOE is ramping up its focus on energy efficiency in tandem with the EPA.

“The EPA’s proposed new rules for existing power plants are a critical step toward addressing climate change,” said Energy Secretary Ernest Moniz in a statement.

“The Office of Enforcement within the DOE’s General Counsel’s Office is stepping up enforcement and verification efforts to ensure products sold in the U.S. meet energy and water conservation standards,” reads the DOE’s Office of Energy Efficiency and Renewable Energy website.

That means manufacturers must comply with complicated efficiency formulas and are responsible for maintaining accurate, up-to-date records within the DOE’s management system as defined by DOE rules.

Dozens of categories of products are affected, including television sets, air conditioners, dehumidifiers, refrigerators, light bulbs, walk-in freezers and even urinals. If not made in Florida, other businesses purchase them here pay the compliance costs indirectly.

The regulatory onslaught is called a “hidden tax” by the Competitive Enterprise Institute.

But the costs don’t just affect businesses.

“Firms generally pass the costs of some taxes along to consumers,” said Clyde Wayne Crews, Jr., CEI’s vice president and director of technology studies, in a report called the Ten Thousand Commandments, a snapshot of the federal regulatory state.

“Likewise, some regulatory compliance costs that businesses face will find their way into the prices that consumers pay and out of the wages workers earn.”

Four of the five highest annual page counts contained in the Federal Register, an official journal of government agency regulations and proposed rules, occurred since 2009.

It’s the price of the Obama administration’s climate change regulatory environment.

Contact William Patrick at wpatrick@watchdog.org