Abby L. Harvey
GHG Monitor
9/12/2014
The Environmental Protection Agency’s new proposed carbon emission guidelines for existing coal-fired power plants are continuing to come under question at the state level, with a group of 15 governors expressing concern in a letter to President Barack Obama this week and a group of state regulators expressing concern during a Congressional hearing. The regulations would set emissions reduction goals for each state and requires them to develop an action plan to meet those targets. In their letter, the governors questioned several aspects of the proposal, including the enforcement of state plans and the availability and impacts of renewables. “Your proposal makes broad assumptions about access to renewables. For example, EPA identifies potential renewable energy targets for individual states by looking at the scope of renewable energy mandates in an arbitrarily-defined region without any regard for the actual availability of renewable resources or saturation points in the individual states. EPA also fails to consider how increased renewable penetration will impact grid reliability and existing baseload capacity,” the governors wrote.
The proposal does not support a balanced national energy mix, the governors wrote. “The economic health of our nation depends on accomplishing a balanced energy and environment policy. The United States should be pursuing a strategy that achieves its objectives without severely harming our economies and pitting states against one another.” The letter was signed by the governors of Alabama, Alaska, Arizona, Idaho, Indiana, Mississippi, New Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Utah, Wisconsin and Wyoming.
State Regulators Question Fairness of Proposal
At a hearing held by the House Energy and Commerce Energy and Power Subcommittee this week, lawmakers heard from regulators from a number of states on their concerns with the EPA proposal, including questions over fairness and how much flexibility states will have to implement the new regulations. Kenneth Anderson, commissioner of the Public Utility Commission of Texas, said the proposal does not give ample credit for measures already taken to reduce emissions and set too lofty a reduction target. “We are disproportionately affected by the proposed rule. If we read the proposal the right way or correctly, we could be responsible for as much as 25 percent of the reduction nationwide while we only produce about 11 percent of the energy in this country,” Anderson said. “One of the reasons that the rule is going to be a problem is that it gives us no credit for the substantial investment in renewables. It’s been principally wind, but it’s not just the actual wind itself, but in the infrastructure necessary to transmit that wind into the load-serving areas of the state.”
Anderson did, however, state that the fact that EPA did not try to take a “one-size-fit-all” approach to setting reduction targets was appreciated. “I actually want to give them credit for recognizing, at least in my experience the first time, that the states are different and are in different positions,” he said.
How Flexible Are Proposed Regulations?
The flexibility of the plan, though, was called into question by Travis Kavulla, commissioner of the Montana Public Service Commission, who stated that flexibility is little consolation for an unreasonable goal. “The much-heralded flexibility that the proposed EPA rule provides to states is a meaningless concept if the underlying goal, a number which is inflexible, has been calculated using generic assumptions that are misleading or false when applied to the facts of a specific state in a specific part of the transmission grid,” Kavulla said.
Kavulla also criticized the EPA for not completing a reliability study or providing enough time or information for utilities to complete such a study themselves. “No reliability analysis of the EPA’s proposed best system of emission reduction has been conducted for the Western Interconnection which encompasses 11 states spanning from California to Montana,” he said. “Transmission planners of the Western Electricity Coordinating Council, which under FERC and NERC, is responsible for adopting and enforcing reliability standards for this large slice of the continent, have told state regulators that they cannot accomplish such an analysis by the October comment deadline.” Rep. Henery Waxman (D-Calif.) questioned this line of debate saying, “My understanding is that many states have urged EPA to give them wide latitude to design their own programs. Does anyone on the panel want EPA to reduce the flexibilities for state compliance in the final rule? I assume nobody wants that. So let’s be fair. You can’t demand freedom to design your own program while criticizing EPA for not spelling out precisely how the carbon reductions will be made.”
Kelly Speakes-Backman, commissioner with the Maryland Public Service Commission, defended the EPA rule, stating that while Maryland does have technical questions regarding the proposed regulations, their structure is sound. “In our view, EPA has constructed a proposed rule which provides the flexibility for states to devise plans with state-specific reliability requirements and resources,” she said. “Even as we formulate our comments for October, Maryland is still reviewing and analyzing the plan. We think the basic structure of this rule is sound. We will have many technical suggestions and questions for EPA on the proposed rate methodology, the translation of rate targets to a single regional mass target and the rule enforceability.”
Some Officials Question EPA’s Interaction With States
Some state officials testified at this week’s hearing that they have not yet attempted to contact the EPA regarding their concerns. Anderson said that Texas has “not reached out to EPA yet” because they are “still trying to digest the rule.” When asked if the state had been approached by EPA regarding the rule, Anderson stated that they had responded to a request for comments prior to the drafting of the rule. Tom Easterly, commissioner of the Indiana Department of Environmental Management said that while EPA has reached out to the state, not all of their concerns were addressed. “EPA certainly spent time with, I’d say, all of the state environmental regulators,” Easterly said. “But at the end of the day, they didn’t take all of our advice. I think that’s a fair way to put it.”
Senators Call for Extension to Comment Period
A group of 53 senators led by Sens. Deb Fischer, (R-Neb.), and Heidi Heitkamp (D-N.D.) requested a 60 day extension to the EPA’s comment period for the rules in a letter sent to EPA Administrator Gina McCarthy late this week. The bipartisan group cited the length, complexity and importance of the proposed regulation as reason to extend the comment period. “While we appreciate EPA granting an initial 120 day comment period, the complexity and magnitude of the proposed rule necessitates an extension. This extension is critical to ensure that state regulatory agencies and other stakeholders have adequate time to fully analyze and comment on the proposal. It is also important to note that the challenge is not only one of commenting on the complexity and sweeping scope of the rule, but also providing an opportunity to digest more than 600 supporting documents released by EPA in support of this proposal,” the senators wrote in the Sept. 11 letter. The comment period is due to end Oct. 16 unless the requested extension is approved.
