EPA GHG REGS: Even in opposition, states are preparing ways to meet Clean Power Plan requirements

Posted by Frank Swigonski on Oct 23, 2014 3:10:54 PM

111D-iconLast month, EPA announced it would extend the public comment period for its proposed Clean Power Plan to December 1. This will give stakeholders and the states, many of which are engaged in public stakeholder processes themselves, an extra 45 days to draft their own comments. AEE is tracking the comment process in our 23 partner states, plus Texas and Florida. We have already submitted state comments with our partners in several states, and we submitted our own set of comments in Florida.

The public comment process is taking place in some states despite political opposition to the EPA plan from their respective governors. Fifteen governors have sent a letter to EPA arguing that the Agency has overstepped its legal authority. While the letter echoes ongoing lawsuits against EPA’s authority to regulate “beyond the fenceline” of power plants and against using 111(d) to regulate sources of pollution already regulated under section 112, some of the signatories - such as Arizona Governor Jan Brewer - are not yet parties to any of the lawsuits against EPA.

According to Bill Becker, executive director of the National Association of Clean Air Agencies (NACAA), some of the states that are pursuing lawsuits are also preparing plans to comply with the Clean Power Plan at the same time. “What we’re seeing, not at the political level or the gubernatorial level, but in the trenches, there’s a huge effort to make this program work,” Becker said.

Louisiana has joined one of the two active lawsuits against the Clean Power Plan but has also prepared substantive comments, which it submitted last month. Louisiana Department of Environmental Quality (DEQ) Secretary Peggy Hatch submitted “initial comments” to EPA in which she argued for the rule to be scrapped in its entirety or, “at the very least,” be revised so that Louisiana’s target emission rate is changed from 883 lbs/MWh to 1,078 lbs/MWh. Hatch provided data supporting what she believes to be a more accurate rendering of Louisiana’s “best system of emission reduction” (BSER).

Although Arizona hasn’t joined a lawsuit against the Clean Power Plan, Gov. Jan Brewer signed the GOP letter questioning EPA’s legal authority to implement the Proposed Rule. Additionally, two of Arizona’s current candidates for state Attorney General are threatening to join the lawsuit if EPA doesn’t alter Arizona’s emission targets. Still, Arizona has also been actively engaging stakeholders in a public comment process regarding the Proposed Rule. The Arizona DEQ held the second in a series of stakeholder meetings on September 24, with AEE’s regional partner, Interwest Energy Alliance, participating. Arizona state Rep. Frank Pratt, chairman of the Energy, Environment and Natural Resources Committee, held a public “field hearing” in Cochise County last month. Cochise County is home to the coal-fired Apache Generating Station, which witnesses feared will be closed as a result of the Proposed Rule, which would in turn hurt the region’s economy. Apache recently settled a dispute with EPA over emissions associated with regional haze by agreeing to convert one of its two coal-fired units to natural gas and adding pollution controls to both units.

Gov. Steve Bullock of Montana - a state which, like Arizona, has significant coal generation assets - recently released a white paper outlining five separate Clean Power Plan compliance scenarios in which none of the state’s nine coal generating stations would close. The white paper also noted that all five scenarios “not only keep the jobs that we currently have and meet the reduction target in the Proposed Rule, but strongly suggest that it would be possible to create new jobs and additional tax revenue, and to further strengthen the economy through the development of new renewable electricity generating capacity and increased investment in cost-effective energy efficiency.” Montana DEQ also held public meetings on the Clean Power Plan in Colstrip on September 30, Billings on October 1, and Missoula on October 2.

Montana is not the only state with a path to compliance with the Clean Power Plan. Two op-eds, one from a former Republican member of the Iowa House and one from AWEA board member and wind blade maker TPI Composites CEO Steve Lockard, argue that Iowa’s wind energy puts it in a good position to comply with the Clean Power Plan. Iowa filed initial comments with EPA in December last year. The Iowa Utilities Board (IUB) and the Iowa Department of Natural Resources (IDNR) are currently holding a 111(d) workgroup. The workgroup last met on September 19, but they are still accepting feedback from workgroup members and the public.

Texas has been vocal in its opposition to EPA’s draft rule. One regulator even claimed that Texas may choose simply not to comply. But evidence from Texas utilities and grid operators suggests that the state is in a better position to reduce carbon emissions than opponents of the rule may claim. Officials at the Electric Reliability Council of Texas (ERCOT) recently told Dallas News that the state is in a much better position this winter from a reliability standpoint, in part because additional wind capacity has added to their capacity margin. Texas added 11,500 MW of wind capacity and another 8,000 MW is slated to be built over the next three years. Greentech Media reports that Texas could be about to embark on a solar development boom, noting that the state is ranked as the sixth most attractive state for solar development by Ernst & Young.

The Illinois Commerce Committee (ICC) held the second of its three planned hearings on September 23. The focus of this hearing was the nuclear and renewable energy industries in Illinois. Exelon and a number of environmental groups testified. The third and final hearing is scheduled for October 30. Exelon, the state’s largest utility, told the ICC that it needs $580 million, or price increases of $6 per MWh, to keep two of its nuclear generating stations running. Exelon’s nuclear fleet, which generates nearly half of Illinois’ electricity, will be key for the state to meet its 33 percent emission reduction required under the Proposed Rule. Exelon executive Kathleen Barron told the ICC that the 6 percent designation of at-risk nuclear in the Proposed Rule doesn’t help Illinois. “There’s not really much of an incentive,” she said.

Pennsylvania’s Department of Environmental Protection (DEP) also held a listening session in September. In October, AEE and its state partner, Keystone Energy Efficiency Alliance (KEEA), co-hosted a meeting of Pennsylvania advanced energy businesses with Deputy Secretary Vince Brisini, the official who will oversee the design of Pennsylvania’s state implementation plan.

Florida’s Jacksonville Electric Authority (JEA) called the Proposed Rule “the most disruptive energy policy proposal in modern times.” The municipal utility operates Northside Generating Station, a $630 million coal-burning facility. JEA has raised fears that the Proposed Rule will cause the plant to close.  AEE recently filed comments with the Florida Public Service Commission which outlined the ways in which advanced energy technologies can help utilities like JEA achieve compliance. The comments included a list of policy options available to municipalities to boost their energy efficiency and renewable energy generation while maintaining existing generating facilities.

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Topics: EPA GHG Regs