The relatively sanguine reaction from most utilities to U.S. EPA’s landmark climate change rule reflects the extent to which power companies are confident in their ability to influence the state governments that will be crafting plans to hit required carbon dioxide emissions reductions. EPA’s proposal was greeted with predictable outrage from coal miners, heavy industry and ideologically motivated interest groups that warned of higher energy prices, lost jobs and a less reliable energy supply. But utilities were generally more likely to welcome — or at least begrudgingly accept — the regulation on existing power plants as something they were already on the way to achieving by switching from coal to natural gas-fired power, promoting energy efficiency and relying more on renewables.
A White House report released today aims to reinforce President Obama’s message from earlier this week that new greenhouse gas regulations are needed because global warming threatens Americans’ health. The seven-page report illustrates the link between climate change and atmospheric ozone, particulate matter and other emissions, which the president and U.S. EPA Administrator Gina McCarthy cited Monday when promoting EPA’s newly released carbon dioxide emissions rule for existing power plants.
Joining forces to cut 30 percent of their carbon emissions by 2030 is a matter of practicality versus political ideology, environmental lawyers and advocates say. “I think it would be shortsighted for the Southeast state air regulators to not at least explore the idea,” said Stephen Smith, executive director for the Southern Alliance for Clean Energy. “I’m just not sure that the ideological inertia will let it be fully vetted.”
It turns out that adding renewable energy to the electricity generation mix doesn’t end up costing all that much, in at least one case it has even saved money. In Colorado the cost came to less than a penny per kilowatt-hour in 2012. Among the 24 states with renewable portfolio standards that were analyzed, the cost of complying between 2010 and 2012 was equal on average, roughly 1 percent of retail electricity rates, according to study by two national laboratories.
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.