Some critics of the Environmental Protection Agency’s new requirementsfor power plants argue that forcing emissions reduction will curtail economic growth. But the recent experience of states that already cap carbon emissions reveals that emissions and economic growth are no longer tightly tied together. One of the ways that states will be able to meet the new E.P.A. standards is by joining a Northeastern cap-and-trade program known as the Regional Greenhouse Gas Initiative, which first put in a carbon cap in 2009. In a cap-and-trade system, the government places a ceiling on total carbon emissions and issues permits for those emissions, which companies can buy and sell from one another.
The cries of protest have been fierce, warning that President Obama’s plan to cut greenhouse gases from power plants will bring soaring electricity bills and even plunge the nation into blackouts. By the time the administration is finished, one prominent critic said, “millions of Americans will be freezing in the dark.” Yet cuts on the scale Mr. Obama is calling for — a 30 percent reduction in emissions from the nation’s electricity industry by 2030 — have already been accomplished in parts of the country.
U.S. EPA’s proposed rule for power plant carbon gives states wide latitude in controlling their emissions, embracing fuel switching, renewable energy and energy efficiency as building blocks on the path to carbon reduction. Given the pervasiveness of carbon dioxide as the result of modern power generation, that “all of the above” approach will be needed to meet the agency’s stringent reduction targets, experts say. At the same time, they caution, the approach may prove to be the rule’s legal Achilles’ heel.
“There’s been a lot of people saying the world’s coming to an end. I don’t think the world’s coming to an end,” Rogers told attendees at the 24th Annual Conference for Energy Storage in Washington, D.C. “I think we’ll find a way to adopt and adapt to the EPA regulations, and quite frankly, they’re not perfect.” The industry, he said, “gets where it’s going,” but may not be moving fast enough. “If you’ve noticed, with the announcement of the EPA rule, you’ve really heard very little pushback from the power sector. You’ve heard a lot from the coal industry,” he said. Utilities “understand the age of their coal plants, and in a sense, this new regulation recognizes the inevitability of shutting down old coal plants.”
What Minnesota presents the nation is a pilot project of sorts, demonstrating the advantages of reducing power plant emissions. The Obama plan allows states considerable flexibility in choosing how to meet the new 2030 emission goals. Rather than seeking ways to resist the EPA order via Congress or the courts, other states should examine the benefits Minnesota is already deriving.
Electricity ratepayers in states with renewable portfolio standards (RPSs) have seen their power bills increase slightly as utilities and other power providers work to incorporate more wind, solar and biomass energy into their fuel mixes. But the overall incremental increase in rates has been modest, averaging roughly 1 percent of what would have occurred had the RPS programs not existed, according to new findings from the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory.
But as the sound bites flew all around them, state regulators who are tasked with implementing the EPA rule kept their heads down and crunched numbers, trying to comprehend what proposed near- and long-term emission targets meant to their states. Theirs was not an easy lift. EPA’s formula at the heart of the proposal is complicated.
Warren Buffett’s Berkshire Hathaway Inc. plans to merge $26 billion in Western power plants, transmission lines and wind farms into a single market that would better manage supply and demand fluctuations and save utilities millions. With California’s grid monitor, the new, united system could transmit electricity across seven states. Pending approval from the Federal Energy Regulatory Commission, beginning Oct. 1, the market would match hourly generator bids to supply, demand and transmission changes every five minutes.
The move would be a game-changer for the renewables that Berkshire Hathaway Energy Co. has accumulated over the past decade, including two of the world’s largest solar farms, and for other clean-power producers, according to those who trade in the region’s markets. Berkshire’s plants stand to run for longer periods of time, and its NV Energy Inc. and PacifiCorp utilities will save as much as $63.9 million annually by 2017, Energy and Environmental Economics Inc. reports show. “It would be huge if all 38 balancing authorities joined,” Sean Breiner, a market design analyst for San Ramon, California-based energy trader Viasyn, said by telephone June 2. “Instead of having these balkanized regions, you’d have resources from Idaho to Wyoming all flowing into one kind of large spot market.”
President Obama’s pick to lead the Federal Energy Regulatory Commission shot back at critics — and tried to soothe Republican skeptics — in documents submitted this week to the Senate Energy and Natural Resources Committee defending his handling of mergers and enforcement cases. But while Norman Bay appears to have found allies on the panel of 12 Democrats and 10 Republicans, at least one top GOP member said his answers raise more questions.