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June 10, 2014
EPA's Clean Power Plan--Part 5

Part 5 - Reactions

Electric utility companies, the entities that will be most directly affected by EPA’s proposed CO2 limits for existing electric generating units (EGUs) at coal-fired power plants, were generally guarded in their responses to the proposal.  Their caution was best summarized by a statement by Tom Kuhn, president of the Edison Electric Institute (EEI).

“As we do with any new EPA regulation, EEI is thoroughly reviewing the proposed guidelines issued today to assess whether they contain achievable compliance requirements and deadlines; recognize the wide range of actions our companies have taken to date that have reduced or avoided emissions; and preserve the fuel diversity and flexibility that ensure electricity remains reliable and affordable for all customers,” said Kuhn. 

A concern about receiving credit for early actions was also expressed by the Tennessee Valley Authority (TVA), a major electric utility company.

“TVA’s 2013 carbon emissions are now 30 percent below 2005 levels, and they are projected to be 40 percent below 2005 levels by 2020,” said the TVA.  “By 2020, TVA’s carbon emissions will be about one-half of what they were at their peak in 1995.  We have achieved these reductions by changing our generation mix and by focusing on energy efficiency and demand side management. We have added natural gas-fired generation, are poised to bring an additional carbon-free nuclear unit on line in 2015 at our Watts Bar site (the country’s first new nuclear generation of the 21st century), retired 14 coal-fired units, and are investing in emissions controls at our ongoing operations. We hope this rule setting the emission guidelines provides an equitable starting point crediting these early actions by TVA and others.”

In its proposal the EPA does acknowledge that early actions must receive some type of credit.  “The EPA is also proposing that measures taken by a state or its sources after the date of this proposal, or programs already in place, and which result in CO2 emission reductions at affected EGUs during the 2020-2030 period, would apply toward achievement of the state’s CO2 goal,” stated the Agency.

The plan is ‘nuts’

Apart from statements from the electric utility sector, reactions to the proposal tended to be repetitions of preexisting positions refuting or supporting the legal authority and usefulness of any actions by the Obama administration to force cuts in CO2 emissions from EGUs.
Perhaps the most unguarded comment came from Republican House Speaker John Boehner “The president’s plan is nuts, there’s really no more succinct way to describe it,” said Boehner.  The Speaker called attention to a bill passed by the House in March 2014, which would prevent the administration from finalizing its proposal without the consent of Congress.  Democrats blocked a Senate vote on the bill.

Jobs lost or gained

As with most negative reactions, Boehner’s brief statement said the proposal would ship jobs overseas and result in higher electricity bills and lower incomes at home.  That sentiment was expressed more explicitly by Cecil E. Roberts, president of the United Mine Workers of America.

"Our initial analysis indicates that there will be a loss of 75,000 direct coal generation jobs in the United States by 2020,” said Roberts in a statement.  “Those are jobs primarily in coal mines, power plants, and railroads.  By 2035, those job losses will more than double to 152,000. That amounts to about a 50 percent cut in these well-paying, highly skilled jobs. When a U.S. government economic multiplier used to calculate the impact of job losses is applied to the entire economy, we estimate that the total impact will be about 485,000 permanent jobs lost.”

Another labor leader was not ready to join in on that bleak appraisal of the proposal’s impact on future employment.  “The immediate focus for the labor movement will be what happens right here at home,” said AFL-CIO President Richard Trumka.  “Will our efforts to fight climate change be another excuse to beat down working Americans, or will we use this opportunity to lift employment standards, to create good jobs in places that need them, to make sure that the promise of a decent retirement after decades of dangerous, difficult work is honored?”

States working together

Under EPA oversight, the states will bear the major responsibility for ensuring that EGUs meet the proposed limits.  One aspect of state response that will likely be extensively discussed is the use of multistate programs to achieve compliance.  The EPA seems to strongly endorse this approach and, in the proposal, continually notes the performance of the Regional Greenhouse Gas Initiative (RGGI), a program in which nine Northeastern states have placed limits on CO2 emissions from power plants. 

The benefits of the multistate approach were noted in a statement by Ken Kimmel, former board chair of the RGGI and current president of the Union of Concerned Scientists.  Kimmel said that the expansion of renewable energy and energy efficiency prompted by the RGGI cut carbon emissions from power plants by about 40 percent since 2005 and are projected to reach approximately a 50 percent cut by 2020.  EPA’s proposed goal is to reduce carbon emissions from existing power plants by 30 percent by 2030. 

“The experience with RGGI shows that states can cut carbon far more cost-effectively if they work together, rather than going it alone,” said Kimmel. “Under the proposed new rule, states can pool their resources to take advantage of the falling cost and wide availability of renewable energy resources and energy efficiency to meet the carbon standard affordably and reliably.”

The next 12 months

As noted, the above statements represent brief, immediate reactions to the proposal.  Over the 120-day comment period, the EPA will receive vast amounts of technical, economic, and environmental information that will support, reject, or seek to amend the proposed standards.  President Obama directed the EPA to complete “carbon pollution standards, regulations or guidelines” by June 1, 2015.  In its final action, will the EPA stick close to what it proposed or veer in another direction?  The next 12 months will be bursting with speculation about the answer to that question.

The proposed Clean Power Plan

Part 1-Introduction

Part 2-State specific goals

Part 3-BSER

Part 4-State plans

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