EPA GHG REGS: We Read the Comments, So You Don't Have To, Part 4: Utilities

Posted by Frank Swigonski and Caitlin Marquis on Jan 19, 2015 11:29:03 AM

After the comment period closed on December 1, the stats were in: EPA received more than 4 million comments on the Clean Power Plan from individuals, organizations, and state regulatory bodies. It would take 71 people working eight hours a day from now until June to read them all. But don't worry—our Carbon Policy Analysts identified the top comments and plowed through them. This is the fourth of five blog posts presenting AEE’s summary of and take on comments from a few key stakeholders: federal and state regulatory organizations, states, ISO/RTOs, utilities, and industry and environmental groups. This post covers comments from major utilities and utility groups.



Utilities reacted strongly to EPA’s Proposed Rule. The Edison Electric Institute, which represents most of the country’s IOUs, filed 400 pages of comments; one of EEI’s key messages was that the rule fails to ensure reliable operation, which echos comments from states and ISOs/RTOs. Nearly all of the comments from individual utilities also contain some discussion of the Proposed Rule’s impact on reliability.

EEI and many individual utilities suggested that EPA is going beyond its legal authority under Section 111(d) of the Clean Air Act by issuing the Clean Power Plan; despite this concern, most utilities also provided detailed comments identifying specific concerns with the Proposed Rule and suggesting improvements. Entergy went as far as correcting assumptions about individual units. Nearly all of the utilities asserted that the 2020 interim targets are unachievable.

Many utilities also submitted Building Block-specific criticisms, with the Arizona Utilities Group, Duke Energy, Vectren, and the Tennessee Valley Authority expressing concerns that a 6 percent heat rate improvement is not technically feasible. Duke argued that running the entire NGCC fleet at 70 percent capacity factor has not been adequately demonstrated, as required by the Clean Air Act. Several utilities, including MidAmerican/PacificCorp and Vectren, expressed concerns that EPA has not properly considered how the building blocks interact with one another. Vectren also argued that the heat rate improvements in Building Block 1 are undermined by the dispatch changes required in Building Block 2, while MidAmerican/PacificCorp is concerned that the high penetration of renewables would require significant amounts of natural gas generation for firming, which would in turn require greater flexibility in Building Block 2.

Utilities, especially those serving only one or two states, are displeased at the disparity of the goals among states. Entergy feels that the states in its territory are at a disadvantage because the states provide 45 percent of the MISO region’s dispatch potential while only making up 24 percent of MISO’s load. Xcel charges that the alternative renewables approach exacerbates the disparity even further and has recommended the RPS-based regional calculation approach EPA set forth in the Proposed Rule over the proposed alternatives. NRG suggested that EPA allow states to design their own trajectories to reach the 2030 goals as a way to help deal with the disparity between states.

Utilities are also consistently concerned about the 2012 baseline and receiving credit for efficiency or renewable investments made prior to 2012. Dominion noted that states should receive credit for unit efficiency achieved before 2012, while Southern found the 2012 baseline for heat rates in Block 1 to be “arbitrary.” Arizona Public Service called for a 2005 baseline, which is echoed by other utilities. Xcel is particularly concerned that the state of Minnesota is being penalized for its early action, arguing that the state is not getting enough credit for incorporating renewable energy into its generation mix prior to 2012, and that NGCC units that were developed to replace coal plants should be exempt from Block 2 requirements in the Clean Power Plan.

One utility stands out as an exception among these reactions: Exelon, with its diverse portfolio of nuclear, wind, solar, and natural gas, said that the Clean Power Plan is “legally and scientifically required” and suggested that EPA use the Rule to encourage the expansion of zero-carbon emission technologies. Exelon also encouraged EPA to include emission standards for all electric generating technologies, including oil-fired combustion turbines and simple cycle combustion turbines. Exelon noted that increased reliance on nuclear plants will help keep the grid reliable.

It is noteworthy that some of the utilities asked for greater specificity on which advanced energy technologies can qualify for compliance. Dominion asked EPA to clarify that supply-side efficiency measures, such as voltage optimization, can be used in state compliance plans, and Vectren asked for clarification that savings from appliance efficiency and building codes can be included in compliance plans.

Download AEE's Comments


Topics: EPA GHG Regs