Electric utilities to EPA: Not so fast with your Clean Power Plan

By Jonathan H Harsch

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Feb. 4, 2015 - Unless you want to join EPA in wading through 3.5 million comments on its plan to reduce coal-power-plant emissions, watch last week's three-hour “Stakeholder Perspectives on EPA's Proposed Clean Power Plan” webcast. The voluminous comments submitted to EPA show the agency is hearing the same opposing messages which the webcast delivered. Those messages:

-- either EPA is demanding miracles that can't possibly be achieved in the 15 years allowed,

-- or else EPA grossly underestimates both the electricity industry's ability to innovate and the tremendous potential of now cost-competitive renewable energy.

Together we can feed the Bees"

To discuss these two contentions, the Bipartisan Policy Center (BPC) and the National Association of Regulatory Utility Commissioners (NARUC) assembled a dozen experts from state regulatory agencies, electric utilities, trade associations and environmental groups for the webcast, the sixth in a series of similar events. Along with debating whether the EPA is demanding too much or not nearly enough, the experts also recognized that none of their points may matter because litigation already under way could throw out the EPA plan as an unconstitutional overreach.

Margot Anderson, executive director of the BPC Energy Project, introduced the discussion by explaining that BPC's aim is to provide “specific guidance for EPA to fix the rule so that it might be more conformable to the kind of challenges that our panelists are facing.”

Tennessee Department of Environment and Conservation Commissioner Bob Martineau, president of the Environmental Council of the States, began by thanking EPA for its “unprecedented amount of outreach and stakeholder engagement.” He also said he recognized that EPA faced major challenges “in the absence of action by Congress to try to address climate change” and welcomed EPA's decision to take a state-by-state rather than one-size-fits all approach.

Martineau, however, joined other panelists in urging EPA to revise its proposal in order to give credit to states which have already reduced carbon emissions, rather than effectively penalizing these “early action” states. He said the Tennessee Valley Authority (TVA) and the state “essentially get no credit” for TVA's 30 percent reduction in greenhouse gas emissions achieved between 2005 and 2012 because EPA uses 2012 as its baseline for reductions.

NARUC President Lisa Edgar, a member of the Florida Public Service Commission, emphasized that every state is unique and that states like Florida that have made progress already “should not be penalized for those early actions.” She added that “it is imperative that as we move forward with this rule and its requirements, that reliability is not detrimentally impacted, and that reductions are set that are feasible.”

As one example of problems with EPA's proposal, Arizona Department of Environmental Quality Director Henry Darwin said the EPA makes the “false assumption” that Arizona could eliminate coal use by 2020 because it bases its plan on yearly averages rather than accounting for summer peak demand for air conditioning. But he said his agency is committed to working closely with EPA to resolve issues and help EPA achieve its national goal of reducing carbon emissions 30 percent by 2030.

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Speaking for 14 states that generally support the EPA plan, New York State Assistant Commissioner for Air Resources, Climate Change and Energy Jared Snyder called the plan “not perfect but a very good start.” He said the Northeast's nine-state Regional Greenhouse Gas Initiative (RGGI) has already achieved emissions reductions that “actually go beyond” the EPA plan. He said EPA's plan “can be made stronger, greater reductions can be achieved and should be achieved.” He said the RGGI states “achieved 40 percent emissions reductions in the eight year period from 2005 to 2013. That is more reduction than the EPA is requiring nationwide by 2030.”

Snyder argued that EPA is too conservative in its projections for using renewable energy and he called for greater investment in renewables like wind and solar power to achieve the needed emissions reductions. He said EPA should pay more attention to RGGI's success in having “harnessed the markets to achieve the most cost-effective reductions.”

Missouri Public Service Commission Chairman Robert Kenney called on EPA to recognize that for states like Missouri which are heavily reliant on coal power, it may be impossible to comply with EPA's short timeframe for meeting emissions reduction goals. He noted that Missouri's natural gas pipelines are designed to meet heating needs, not added electricity generation, so that more time is needed to build more pipelines. But he concluded that Missouri's critique of the EPA plan “is not intended to unnecessarily impede the implementation of the Clean Power Plan. . .  It is only intended to help improve its implementation so that it can in fact achieve its ultimate goal of reducing carbon emissions.”

EPA's Clean Power Plan proposal was announced last June and is due to be finalized this summer. EPA is expected to revise its plan in response to the comments it has received and the ongoing debate.

Currently, the plan proposes fixed target emission rates in pounds of carbon dioxide (CO2) released per megawatt-hour of electricity generation. EPA has proposed individual state targets based on regional variations in electricity generation and demand. Only Vermont is exempt from the plan, because EPA considers Vermont to have already achieved sufficient carbon reductions.

Nationally, EPA's plan is designed to reduce carbon emissions 30 percent below 2005 levels by 2030, with states required to show substantial progress achieved by 2020. The proposal provides states with flexibility in designing their own mix of approaches to reducing carbon emissions but requires each state to submit its state plan by June 2016 or request a one-year extension.

The ongoing debate includes a series of public meetings being held by the Federal Energy Regulatory Commission (FERC) to consider how EPA's Clean Power Plan could impact electricity reliability and the need to build new infrastructure including electric transmission lines and natural gas pipelines. FERC's “National Overview of EPA's Clean Power Plan” meetings are scheduled for Feb. 19 and March 11 in Washington, Feb. 25 in Denver, and March 31 in St. Louis.

The debate over the EPA plan also includes challenging comments jointly submitted by Harvard Constitutional Law Professor Laurence H. Tribe and Peabody Energy Corporation stating that the proposed rule should be withdrawn. It is a remarkable example of executive overreach and an administrative agency's assertion of power beyond its statutory authority. Indeed, the Proposed Rule raises serious constitutional questions,” they wrote.

#30

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