|Select Economic and Energy Data†||Value||State Rank|
|Real Gross Domestic Product, per capita||$32,049||12th lowest|
|Gasoline Price, per gallon||$2.95||6th highest|
|Electricity Price, per kWh||6.78¢||6th lowest|
Utah benefits from some of the most affordable electricity prices in the nation. Coal provides more than 80 percent of the state’s electricity, which contributes to the state’s low prices because coal is the most affordable energy resource. About 15 percent of Utah’s electricity is produced from natural gas, while hydroelectricity and geothermal combined contribute about 2 percent to the state’s electricity supply.
Utah is home to vast energy resources including reserves of oil, coal, and natural gas. It accounts for approximately one percent of the nation’s oil production, 2 percent of natural gas production, over 2 percent of the nation’s coal production. Coalbed methane accounts for almost 20 percent of Utah’s natural gas production. The Green River Formation, part of which is in eastern Utah, holds the largest known oil shale deposits in the world. The U.S. Geological Survey estimates that oil shale in Utah, Colorado, and Wyoming holds over two trillion barrels of oil resources. Utah is one of the few states with geothermal electricity generation with two operational facilities.
Regulatory Impediments to Affordable Energy
Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.
Below are some facts about Utah’s regulatory environment that are likely to affect the cost of energy or the cost of using energy. Utah has thus far avoided many of the costly energy policies other states are implementing.
- Utah does not cap greenhouse gas emissions.
- Utah is a member of the Western Climate Initiative (WCI), a regional agreement among some American governors and Canadian premiers to target greenhouse gas reductions. The central component of this agreement is the eventual enactment of a cap-and-trade scheme to reduce greenhouse gas emissions 15 percent below 2005 levels by 2020. Such a plan would need to be enacted by the state legislature, which was not consulted when Utah’s governor joined the Western Climate Initiative.
- Utah does not require that utilities generate from renewable sources a certain percentage of the electricity that they sell. But the state has renewable portfolio goal which calls for utilities to generate 20 percent of adjusted retail electricity sales from renewables by 2025, if cost-effective.[i]
- Utah does not require gasoline to be mixed with renewable fuels. However, the state requires the use of a low volatility blend of motor fuel in the Salt Lake and Provo-Orem metropolitan areas.[ii]
- Utah does not impose automobile fuel economy standards similar to California’s, which include California’s attempts to regulate greenhouse gas emissions from new vehicles. The Western Climate Initiative has agreed to adopt California’s vehicle emissions standards, but the state legislatures in each state would need to approve these regulations and Utah’s legislature has not passed the necessary regulation to impose California’s automobile fuel economy standards on Utahans.
- Utah requires new residential and commercial buildings to meet energy efficiency standards. Residential and commercial buildings must meet the 2006 International Energy Conservation Code (IECC). Commercial buildings must also meet ASHRAE 90.1-2004.[iii] IECC (developed by the International Code Council) and ASHRAE 90.1 (developed by the American Society of Heating and Refrigeration and Air Conditioning Engineers) are model codes that mandate certain energy efficiency standards. House Bill 80, enacted in 2006, requires the development of efficiency guidelines for new state construction.[iv]
- Utah does not impose state-based appliance efficiency standards, but Utah requires state agencies to purchase energy-efficient appliances. House Bill 80, enacted in 2006, requires state agencies to buy energy-efficient products whenever practical.[v]
- Utah does not allow utilities to “decouple” revenue from the sale of electricity and natural gas. Some states decouple revenue from actual sales, allowing utilities to increase their revenue by selling less electricity and natural gas.
† Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity, (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.
[i] Energy Resources and Carbon Emission Reduction Initiative, S.B. 202 (Utah 2008), http://le.utah.gov/~2008/bills/sbillenr/sb0202.pdf.
[ii] Energy Information Administration, Utah, Apr. 8, 2010, http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=UT.
[iii] Building Codes Assistance Project, Code Status: Utah, http://bcap-energy.org/node/97.
[iv] Energy Savings in State Buildings, H.B. 80 (Utah 2006), http://www.le.state.ut.us/~2006/bills/hbillenr/hb0080.pdf.