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EPA Gets Earful Regarding Carbon Emissions Proposal

Proposed federal greenhouse gas (GHG) emissions rules are either an economic burden or an environmental necessity, according to millions of comments submitted to the U.S. Environmental Protection Agency (EPA).

Regulators said this week they received more than 1.6 million comments on their plan to limit power plants emissions (see Daily GPI, June 2). Industry organizations overall called the proposed rules an economic burden, while environmental groups urged their implementation to help prevent climate change.

EPA issued its 645-page Clean Power Plan Proposed Rule in June as a centerpiece to President Obama's climate change plan. The  primary target is existing power plants, the single largest source of carbon pollution in the United States.

The proposed rules aim to cut carbon emissions from the power generation sector 30% below 2005 levels by 2030, a move that has been cautiously embraced by the natural gas industry, characterized as a "coal killer" by some critics, and hailed by environmental groups as a major effort to address climate change.

The proposal could be finalized by next summer with full implementation by 2020. In the interim, the prospect of legal actions against the rules is real, given the opposition by many states and industry organizations.

Besides the alleged economic impacts, opponents are raising questions about what the emissions restrictions would mean for future electric grid reliability if more coal-fired generation plants were shuttered.

Federal Energy Regulatory Commissioner Philip Moeller on Monday questioned the ability of both the power and natural gas grids to respond by 2020 to the significant changes that would be created under the new rules.

The rules “seem to assume that a significant amount of new natural gas pipelines needed to fuel power plants, along with a similarly significant expansion of the nation's electric transmission system, will suddenly appear to meet the new demands," Moeller said in a letter to EPA Administrator Gina McCarthy.

The North American Electric Reliability Corp. (NERC), the monitor for the interstate power grid, told EPA that its proposed timeline for the new rules did not allow for sufficient new resources to be developed to ensure continued reliability of the grid in 2020. NERC said the use of controlled and uncontrolled outages would potentially be required on a widespread basis.

However, some state regulators support the rules, and countered in their comments to EPA that there is a lot that could be done at the state level to head off potential reliability impacts. The Midcontinent States Environmental and Energy Regulators also has been formed to find the best ways for states to comply with the proposed rules, assuming they are implemented and survive legal challenges that are expected to follow.

A National Economic Research Association (NERA) study has estimated the compliance costs for the new rules of $41-73 billion. NERA also projects that 43 states will see double-digit increases in the price of electricity as a result of the EPA rules, according to Wyoming Gov. Matt Mead, who on Monday also called for the proposed rules to be scrapped.

Wyoming coal operators have consistently invested in new technologies to run more efficiently, Mead said, but the EPA's proposed rules would impose a level of additional improvement "not possible or practical," given the cost.

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