EPA CO2 Regs ‘The Most Fundamental Transformation’ Of US Power

2/20/2015

Environmental Protection Agency (EPA) Administrator arrives to sign a proposal under the Clean Air Act to cut carbon pollution from existing power plants during a news conference in Washington June 2, 2014. The U.S. power sector must cut carbon dioxide emissions 30 percent by 2030 from 2005 levels, according to federal regulations unveiled on Monday that form the centerpiece of the Obama administration's climate change strategy. REUTERS/Joshua Roberts (UNITED STATES - Tags: POLITICS ENERGY ENVIRONMENT) - RTR3RVIJ

The head of a major U.S. utility said EPA rules to fight global warming will fundamentally transform the way America generates and delivers electricity to millions of residents.

Gerry Anderson, Chairman and CEO of the utility DTE Energy, told the Federal Energy Regulatory Commission that the EPA’s Clean Power Plan “is the most fundamental transformation of our bulk power system that we’ve ever undertaken.”

FERC held a hearing Thursday on the EPA’s plan to cut carbon dioxide emissions from power plants 30 percent below 2005 levels by 2030. The plan is the keystone of the Obama administration’s climate agenda as power plants emit one-third of the country’s carbon dioxide emissions.

The rule will lower carbon emissions, but at the cost of forcing coal-fired power plants across the country to prematurely retire. These retiring coal plants must, however, be replaced, which requires huge investments in new gas-fired power plants and green energy projects. And much of this must be done by 2020 — five years from now.

“The EPA proposal does not appear to contemplate that the speed and intensity of these changes require dramatic infrastructure expansion, and likely will lead to significant changes in the way wholesale electricity markets function, therefore threatening electric reliability,” Anderson told FERC.

States and utilities have pushed back against the EPA’s plan, saying it would raise electric rates and harm grid reliability. Anderson was not alone in expressing his concerns over the impacts of the EPA’s carbon rule.

“EPA’s blind pursuit of a narrow, politically-motivated agenda has so far disregarded the concerns of FERC and other energy industry experts,” said Mike Duncan, president of the American Coalition for Clean Coal Electricity.

“The agency’s Clean Power Plan is not only legally flawed, but, if implemented, will seriously impact the supply of reliable electricity throughout the U.S.,” Duncan said.

FERC commissioners themselves have questioned the feasibility of the EPA’s carbon rule, saying it could further add to reliability woes the grid is dealing with from past agency regulations.

“I was, and remain concerned that EPA’s analysis greatly underestimated the amount of power production that would be retired due to these rules,” FERC Commissioner Philip Moeller testified before the Senate last year. “The experience of this winter strongly suggests that parts of the nation’s bulk power system are in a more precarious situation than I had feared in the past.”

Moeller’s testimony came after last winter’s polar vortex took power plants offline around the country. Without coal power many Americans would have been without power — the utility American Electric Power said it had to turn on 89 percent of its retiring coal power capacity to keep the lights on.

FERC Commissioner Tony Clark sent a letter to Senate lawmakers saying, “I believe it would be incorrect to suggest that FERC and its staff have had a significant or meaningful role in providing EPA the sort of detailed, technical analysis that will be required to ensure the CPP does not impact grid reliability.”

But the EPA said the Clean Power Plan would lower carbon dioxide emissions and even future energy prices. The agency recently announced it was making changes to the final draft of the Clean Power Plan, and it’s doing what it can to address all concerns over the plan.

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