Monthly Archives: October 2014

Coal Related News from Around the Nation

Kansas Regulators, Commission Staff Slam EPA Carbon Proposal

Utility commissioners in Kansas are the latest group to take aim at the Obama administration’s plan to slash greenhouse gas emissions from fossil-fuel-burning power plants, calling U.S. EPA’s Clean Power Plan a federal overreach that will burden consumers and the state’s economy.

In a 40-page report submitted to U.S. EPA Administrator Gina McCarthy, the Kansas Corporation Commission staff — a group of accountants, engineers and economists — delivered harsh criticism of almost every aspect of the rule proposed June 2 and called on the agency to withdraw the proposal.

Commissioners, in a signed letter accompanying the report, said that they “embrace” the views of the staff and that by proposing the rule, EPA is overreaching its authority.

“In its proposed Clean Power Plan, the EPA has inserted itself into a regulatory field occupied by the states for decades in which the states have proven expertise in public utility ratemaking and in understanding the complexity of the electric grid and electric reliability,” the three-member commission said.

“The proposed rule will disrupt the carefully balanced, cost-effective delivery of electricity in Kansas and will lead to detrimental economic effects within the Kansas economy and within the states with which Kansas does business.”

Specifically, the KCC staff report estimated that compliance with the rule, as proposed, would cost the state $5 billion to $15 billion over 13 years, the equivalent of a 10 percent to 30 percent increase in electric rates.

At least a portion of those costs, the commission staff says, will come in the form of stranded costs related to the $3 billion-plus in environmental compliance costs in EPA-approved state implementation plans.

The Kansas commission’s critique of the Clean Power Plan relies at least in part on analysis by the Southwest Power Pool, the grid operator for the central Plains whose footprint includes all of the state (EnergyWire, Oct. 10).

Members of the Kansas commission are all appointees of Gov. Sam Brownback, the Republican who holds a slim lead over Democratic challenger Paul Davis in the race for governor, according to a recent poll.

The state, known for being one of the nation’s leading wind energy producers, yet one also still heavily reliant on coal for electricity generation, has also been a battleground for conservative-led efforts to repeal state renewable energy standards.

Read the article here. [Subscription required.]

It’s Foolish to Discard Coal as a Power Source

Michael Silver is right to cite the importance of mining to renewable-energy technologies, as well as the hypocrisy of those who support the latter (renewables) while opposing the former (mining) in “The Environmentalist’s Catch-22” (op-ed, Oct. 9). But he’s wrong to urge the elimination of traditional energy sources like coal, both from an economic and environmental perspective.

Over the last three decades, emissions from U.S. power plants using coal have declined substantially, and mines today operate under the latest and most stringent environmental standards. It is coal that provides reliable and affordable power to the mines that produce minerals contained in LED lights and other high-tech devices, as well as the facilities that manufacture them. And coal is the only energy source that exists in sufficient abundance globally to meet the energy needs of developed and developing nations, providing over 40% of the world’s reliable and affordable electricity.

Coal is vital to our daily lives and to our nation’s energy mix. The author’s utopian vision of a world without coal would leave much of the world in the dark.

Stuart A. Sanderson

President

Colorado Mining Association

Denver

Read the article here.

Energy Cost Rise: A Pledge Obama (Unfortunately) Kept

Inflation: We’ve chastised President Obama many times for failing to live up to promises he made when running for the office. So in fairness, we want to credit him for fulfilling one of them: his pledge to raise energy costs.

In early 2008, candidate Obama told the San Francisco Chronicle that “under my plan … electricity rates would necessarily skyrocket.”

Obama was referring to his plan to cap greenhouse-gas emissions, which would, among other things, effectively choke off coal as an energy source. He was just as fond of high gasoline prices, telling CNBC in June 2008 — as gas prices shot up to $4 a gallon — that he “would have preferred a gradual adjustment.”

Six years later, and Obama has succeeded.

According to the Bureau of Labor Statistics, the energy price index has been higher than the overall Consumer Price Index since December 2010 — 46 straight months and counting.

To say this is a historical anomaly is putting it mildly. Almost without exception, energy prices climbed more slowly than the overall CPI since 1957, the first year in the BLS’ monthly energy price data.

Even in the wake of the “energy crisis,” the energy index barely topped the CPI. And while the 2008 gasoline price spike pushed energy costs up, it lasted for only a short time. When Obama took office, the energy price index was 15% below the overall CPI.

Since then, gasoline prices have been stuck above $3 a gallon while electricity prices climb. In the first half of this year, they jumped 3.2% — the highest on record since 2009.

Why the big reversal? Despite Obama’s alleged “all of the above” energy policy, he’s declared virtual war on conventional energy sources.

Oil production on federal lands has dropped 6%, according to a Congressional Research Service report. Obama continues to block the Keystone XL Pipeline, and he’s planning new smog rules that will dramatically raise the cost of energy production.

The EPA’s greenhouse-gas rules could be the death knell for coal — which generates almost 40% of the nation’s electricity.

So congratulations, Mr. President. You’ve made it that much harder for the economy to grow and for families to make ends meet.

Read the article here.

 

EPA Climate Plan Strips Away States’ Flexibility, Ga. Regulator Says

Georgia’s utility regulators will do whatever they can to fight U.S. EPA’s proposed carbon rule for existing power plants, the Georgia Public Service Commission chairman said yesterday.

At the same time, such a decision will be left to the courts, said Chuck Eaton, speaking to a small group of energy industry professionals.

“We have to check our politics at the door and figure out how to implement this extremely aggressive schedule,” he said.

EPA wants a broad reduction in carbon emissions by 2030 and assigned each state a specific target. For Georgia, this means cutting greenhouse gas emissions by 46 percent. The number is based on a formula EPA used after looking at the state’s power plant fleet in 2012.

Suggestions to meet these targets include building more nuclear reactors, adding renewables, running more natural gas plants more often and reducing overall demand on the power grid. Georgia’s utilities and policymakers argue that they are already doing those things — including stepping out early to add the nation’s first two new reactors in nearly 30 years — but that those efforts already were baked into EPA’s calculations.

“Here in Georgia, 111(d) is going to be extremely difficult to implement,” Eaton said, referring to the section of the Clean Air Act that is related to the rule.

The rule takes away the flexibility the PSC has with Georgia Power’s long-term energy plan, which the agency reviews and approves every three years. It also means more nuclear power is a matter of “when,” not “if,” he said.

“111(d) is as much a nuclear expansion rule as it is anything,” he said. “If you’re going to take coal off the map, nuclear becomes more and more important. You’re going to see more nuclear.”

The PSC last approved Georgia Power’s Integrated Resource Plan (IRP) in 2013.

The utility hasn’t spoken directly with Eaton about how EPA’s Clean Power Plan would factor into the IRP, he said in an interview with EnergyWire. The rule tosses out the tradition of combining economics and a diverse fuel mix to come up with a long-term plan, however, he said.

“It’s taking away our flexibility to choose the lowest-cost option, economic dispatch, and force us to using certain options that may be a lower cost one year and could be the highest cost the next year,” he said.

Georgia Power and its parent, Atlanta-based Southern Co., have always been aggressive about keeping nuclear in its mix of fuel options. Southern CEO Tom Fanning frequently touts Georgia Power’s Plant Vogtle nuclear expansion project and said in July that he would “love to announce by the end of this year the development of a new nuclear option” (E&ENews PM, July 23).

Fanning told analysts a few days later that the company would start the permitting process only if state utility regulators concurred on adding more nuclear and that whichever four of Southern’s utilities was building the project would be able to recoup the costs.

“That preserves the option to build new nuclear if that looks like that’s desirable from a customer standpoint in the future,” he said (EnergyWire, July 31).

Eaton said Georgia Power has not come to him with any specifics such as “this is what we’re looking at and when,” he said.

But if the carbon rule is implemented, especially as it’s written, there’s just not many other options for baseload power, he said. He considers it risky to invest exclusively in natural gas because of its price volatility.

Even with ample supplies of natural gas at low prices, that’s certain to change if every utility in the United States starts using more of it, he said.

“If you’re going to continue to take coal off the map, then you’re going to have to look to other large-scale options,” he said.

See the article here.

SCC Says EPA Carbon Plan Could Raise Power Bills in Va. “Substantially”

Complying with the EPA’s proposed carbon emission rules would likely cost Dominion Virginia Power customers alone an extra $5.5 billion to $6 billion, the State Corporation Commission’s staff said in an unusually bluntly worded statement.

The EPA’s proposed regulations would “increase substantially” the bills that all 3.6 million Virginia electricity customers pay for their power, the commission staff said, and could significantly affect the reliability of electric service.

The SCC staff anticipates electricity bills would go up significantly because the federal rules would require much of today’s electricity production be replaced with costly generation and expensive programs to decrease energy use.

“Those higher costs will be reflected in the electric bills paid by customers,” said the commission’s staff, emphasizing that statement with italic type.

The SCC staff made the statements in its official comments filed this week with the EPA on the federal agency’s proposed Clean Power Plan.

The U.S. Environmental Protection Agency’s plan, announced in June, calls for cutting carbon emissions from existing power plants 30 percent below 2005 levels by 2030 in an effort to fight climate change, improve public health and provide affordable energy.

Environmental groups took the commission staff to task over its views.

“The SCC staff analysis is just plain wrong,” said Glen Besa, director of the Sierra Club’s Virginia Chapter. “They’re playing politics with climate change science and they have no business doing that, and they’re bringing discredit on the commission.”

“It appears the staff has misread the rule,” said Cale Jaffe, director of the Southern Environmental Law Center’s Virginia office. “Analyses that we have reviewed show that Virginia is already 80 percent of the way to meeting Virginia’s carbon pollution target under the Clean Power Plan.

“Almost all of those reductions are coming from coal plant retirements and natural gas conversions that the utilities put in place long before the Clean Power Plan was even released,” Jaffe said.

The SCC staff said it takes no position on the broad policy questions involving carbon emission reductions on a national level, the best way to achieve those cuts, or whether the U.S. should have a national “Clean Power Plan.”

Its comments, the staff said, should not be construed as representing the views of the SCC’s commissioners, who may have to to decide on utility plans to comply with the federal rules. The staff answers to the commission.

The state’s economy and daily life largely runs on electricity. Virginia’s people, businesses and governments depend on having reliable electric service at reasonable rates, the staff noted. The SCC is the state agency charged with making sure they do.

The SCC staff said it made an “indicative cost analysis” of the incremental cost for Dominion Virginia Power to achieve the EPA’s carbon reduction goals. The Richmond-based power company is the state’s largest electric utility, serving two-thirds of Virginia electricity customers.

To make the carbon emission reductions called for in the proposed regulation, the EPA’s own model predicts that Virginia utilities will have to shut down fossil-fuel power plants reliably producing 2,851 megawatts of electricity, and replace that generation with just 351 megawatts of unreliable land-based wind power. “This raises alarming regional reliability concerns,” the staff said.

The power plants involved today ensure reliable service to Virginia customers, have years of useful life remaining, and cannot be replaced overnight or without regard for impacts on the electric system, the commission experts said. “It will be a challenge to meet federal reliability requirements during such a transition.”

Even if the operational concerns of replacing dependable fossil-fuel generation with variable, intermittent and “nondispatchable” — unreliable — wind and solar energy could be managed, the staff said, “there is still zero probability that wind and solar resources can be developed in the time and on the scale necessary to accommodate the zero-carbon generation levels needed” to meet the EPA’s mandatory carbon-reduction goal for 2020.

The state’s residents and businesses also will be responsible for paying the remaining costs for useful power plants the EPA rules would shut down prematurely, the staff said.

“Much of this investment has been constructed to comply with EPA consent decrees on which the ink is hardly dry,” the SCC staff said. “The federal government has, in essence, required Virginia residents and businesses to build a house, take out an expensive mortgage on it, and then directed that house be torn down.”

But, the staff said, “The expensive mortgage must still be paid off.”

By 2030, the EPA has said, its proposal would reduce carbon emissions from existing power plants nationwide by 30 percent below 2005 levels, while shrinking electricity bills about 8 percent through increased energy efficiency and reduced demand on the electricity system.

But, the SCC staff said, “Contrary to the claim that ‘rates will go up, but bills will go down,’ experience and costs in Virginia make it extremely unlikely that either electric rates or bills in Virginia will go down as a result of the proposed regulation.”

The prospective EPA rules also raise legal concerns, the staff said. No fossil-fueled power plant in Virginia currently meets the carbon emission rate proposed for the state, the staff said. But the SCC pointed out that the federal proposal imposes substantially more stringent emission requirements for existing power plants in Virginia than for as-yet-unbuilt new units.

Calling that effect of the rules “topsy-turvy,” the staff asked, “Would it be rational to require the current owners of automobiles or lawnmowers throughout Virginia, for example, to meet an emission standard that is 26 percent more stringent than required for the production of new cars or lawnmowers that must use the best available technology?”

The EPA’s proposed rules also fail to recognize substantial recent utility investments that have made big cuts in carbon dioxide and other emissions in Virginia, the SCC staff said. From 2005 to 2012, the staff said, Virginia utilities reduced their carbon emissions from generation facilities by about 40 percent through improving power plant efficiency, retiring old units and adding new natural-gas plants.

See the article here.

Industry-Backed Report Says EPA Climate Rule to Cost $366B

A study commissioned by the coal industry and other business groups found that the Environmental Protection Agency’s (EPA) carbon rule for power plants could cost at least $366 billion.

The analysis, written by Nera Economic Consulting, said that people in 43 states would see double-digit percentage increases in their electricity bills, with at least 20 percent increases in 14 states.

Meanwhile, the carbon dioxide reductions would only limit global warming by 0.02 degrees and sea level rises by 0.01 inch, researchers said.

Fight back against the economic costs and skyrocketing electricity rates that the EPA’s power plant regulations are going to create — send a letter to your lawmakers opposing the EPA’s plan today. Take Action here.

“This analysis is further confirmation that it would be irresponsible for any state to implement EPA’s costly power plan,” Hal Quinn, president of the National Mining Association, said in a statement. “Asking Americans to pay more in return for less energy and fewer jobs is not a plan that provides them the economic security they deserve.”

Mike Duncan, president of the American Coalition for Clean Coal Electricity, said the analysis shows major problems with the proposed rule.

“I have one thing to say to the president — pull this rule before irrevocable consequences hit American people and businesses,” he said.

“EPA’s proposal creates major questions about the reliability and affordability of electricity across the country while not doing much to address the problem it seeks to solve,” said the American Farm Bureau Federation.

Those three groups commissioned the study, along with American Fuel & Petrochemical Manufacturers, the Association of American Railroads, the Electric Reliability Coordinating Council and the Consumer Energy Alliance.

Nera concluded that the EPA’s rule would cost consumers and businesses $41 billion or more a year, nearly five times the costs of all Clean Air Act rules for power plants prior to 2010.

Much of that cost comes from consumers paying more than $500 billion to reduce energy use.

Nera said the proposed rule would close 45,000 megawatts of coal-fired power generation capacity, which is more than New England’s entire capacity.

The EPA maintains that its rule’s benefits would outweigh its costs.

“These benefits far outweigh the costs in terms of our health and our analysis shows that bills will decrease because we’ll be using energy more efficiently,” spokeswoman Liz Purchia said.

Purchia accused the industry of inflating the costs of past EPA rules, and said that history makes it clear that the benefits have exceeded costs.

“This is the same tired rhetoric we’ve heard for decades. We heard it about phasing out leaded gasoline, we heard it about acid rain, and we heard it about the ozone layer,” she said.

According to the agency’s analysis, compliance would cost $7.3 billion to $8.8 billion annually, much less than Nera said. It would increase electricity costs slightly, but new energy efficiency gains would save consumers money by the 2030 compliance deadline.

Among the benefits of the rule would be between $55 billion and $93 billion in public health improvements, the EPA said.

See the article here.

 

New Study Confirms Major Economic Costs from EPA’s Proposed Carbon Regulations

Washington, D.C. – New analysis from NERA Economic Consulting projects significant negative economic impacts resulting from the Environmental Protection Agency’s proposed “Clean Power Plan” to regulate CO2 emissions from existing fossil-fuel power plants under section 111(d) of the Clean Air Act.

Fight back against the economic costs and skyrocketing electricity rates that the EPA’s power plant regulations are going to create — send a letter to your lawmakers opposing the EPA’s plan today. Take Action here.

NERA projects that the costs to comply with EPA’s proposed plan could total $366 billion, or more, in today’s dollars. The analysis also finds that 43 states will have double-digit electricity price increases, with 14 states potentially facing peak year electricity price increases that exceed 20 percent. Despite these significant costs, EPA’s proposal would have a meaningless effect on global climate change: atmospheric CO2 concentrations would be reduced by less than one-half of a percent, equating to reductions in global average temperature of less than 2/100th of a degree, and sea level rise would be reduced by 1/100th of an inch—equal to the thickness of three sheets of paper.

NERA also projected that EPA’s Clean Power Plan could cost consumers and businesses a staggering $41 billion or more per year, far outpacing the costs of all Clean Air Act rules for power plants in 2010 ($7 billion) and the annual cost of the Mercury and Air Toxics Standards rule ($10 billion). Much of NERA’s cost projection is based on consumers having to spend more than $500 billion to reduce their use of electricity. The NERA analysis also finds that the proposal could shutter 45,000 megawatts or more of coal-based electricity, which is more than the entire electricity supply of New England.

EPA’s proposal sets state CO2 emission rate targets for 49 states based on four EPA “building blocks.” The new analysis is based on combinations of building blocks that states might use to comply with the EPA targets.

A number of national organizations that are concerned about higher energy prices support the new NERA research, including: the American Farm Bureau Federation, American Fuel & Petrochemical Manufacturers, Association of American Railroads, Consumer Energy Alliance, Electric Reliability Coordinating Council, National Mining Association and the American Coalition for Clean Coal Electricity.

“EPA’s proposal creates major questions about the reliability and affordability of electricity across the country while not doing much to address the problem it seeks to solve,” said the American Farm Bureau Federation. “Merely reducing fossil fuel emissions without producing a measurable impact on world temperature or climate cannot be regarded as a success. Instead, EPA’s plan will affect all Americans negatively, and farmers and ranchers will be especially hard hit because of the energy intensive nature of producing food, feed and fiber.”

“As economic indicators remain weak and American families struggle just to keep up, President Obama owes the nation a rational explanation as to why he’s determined to jeopardize their welfare,” said American Fuel & Petrochemical Manufacturers President Charlie Drevna. “This Administration knows that proposed new regulations will have little to no environmental benefit, but will raise costs for every single American consumer, and unfortunately those that can least afford it will bear a disproportionate brunt.”

“America’s rail industry shares concerns about the far-reaching impact the EPA’s proposals would have on the country’s energy market and the economy in general,” said Edward R. Hamberger, President and CEO of the Association of American Railroads. “At a time when the economy is gaining strength, and with freight railroads playing a key role, the very real potential of coal generation declining by as much 71 percent, double-digit electricity price increases, and 30 percent hikes in natural gas would undermine the nation’s competitiveness, unnecessarily harm all industries that rely on competitive energy prices, and frankly, is the last thing the U.S. can afford at this time of fragile economic growth.”

“Although EPA continues to claim that its proposed regulations will not hurt electricity consumers, this important study shows just how significant the impacts of these rules would be if the proposal is adopted,” said Michael Whatley, executive vice president at the Consumer Energy Alliance. “As the voice of American energy consumers, CEA continues to urge the agency to work with states, utilities and electric cooperatives to ensure that any carbon control regime will not cripple the economy with either blackouts or price spikes.”

“The proposed rule on existing power plants is likely to produce very little if any environmental or health benefits,” noted Scott Segal, director of the Electric Reliability Coordinating Council, a diverse group of power companies serving millions of consumers nationwide. “However, as NERA’s data clearly demonstrates, the rule will come at extraordinary cost to consumers including businesses, households, and individuals living on fixed incomes or at or near the poverty level. The rule will also have profound effects on electric reliability, as our regional transmission organizations have reported.”

“This analysis is further confirmation that it would be irresponsible for any state to implement EPA’s costly power plan. Asking Americans to pay more in return for less energy and fewer jobs is not a plan that provides them the economic security they deserve,” Hal Quinn, president and CEO of the National Mining Association, said.

“The president’s regulatory crusade to be a global leader on climate change is plagued with problems. For starters, it is exorbitantly expensive and will result in marginal global benefits. Then there is the inescapable fact that the proposed rule will drive up energy costs and threaten to idle America’s burgeoning manufacturing renaissance. Finally, adding insult to injury, other world leaders are rejecting the president’s plan as they fear putting their own countries into an economic tailspin. I have one thing to say to the president – pull this rule before irrevocable consequences hit American people and businesses,” said Mike Duncan, president and CEO of the American Coalition for Clean Coal Electricity.

See the press release here.

Grid Operator Urges EPA to Delay Carbon Plan Implementation by 5 Years

On its website, the Southwest Power Pool says its mission is to help “keep the lights on … today and in the future.”

On Wednesday, the grid operator for all or part of nine states in the Great Plains said that will be more difficult with U.S. EPA’s Clean Power Plan, which could lead to transmission overloads, even rolling power outages.

Based on a recently completed reliability assessment, SPP officials urged EPA to extend the proposed carbon plan compliance deadline by five years and called for more detailed study of the plan’s effect on reliability.

“Extending the schedule for compliance will help states develop plans that are achievable and acceptable to EPA, reduce risks of reliability impacts and violations of reliability standards,” SPP’s CEO, Nicholas Brown, said in comments to EPA Administrator Gina McCarthy.

“The real point is that we need time,” Lanny Nickell, SPP’s vice president of engineering, said in an interview. “We need time to build generation, and we need time to build transmission.”

Without that additional time, and assuming that EPA’s projections that 9 gigawatts of fossil generation will retire by 2020 with the grid operator’s footprint come to pass, utilities could face a difficult choice.

“What’s likely to happen if the 2020 time frame stays in place for the proposed interim goals, I think utilities will be forced to make a choice between either complying with the environmental regulations or complying with the reliability requirements,” Nickell said.

But John Moore, a senior attorney for the Natural Resources Defense Council’s Sustainable FERC Project, said the SPP analysis is “jumping the gun with premature warnings of dire consequences.”

Moore said there’s a glaring omission in the study — that new generation and energy efficiency will meet any potential void left by power plant retirements. He said SPP’s approach is akin to “a home remodeler who tears out the weight-bearing walls without building any new supports, and then wonders why the building buckles.”

It’s also not a given that all of the fossil plants that EPA projects will retire will indeed close.

“It’s absolutely fine to, from a reliability perspective, to look at what generation changes may occur,” Moore said. “But that’s something that’s an iterative process and involves talking with the generation owners themselves and understanding in this case how the states will usually comply. It’s been made very clear that this study doesn’t even begin to look at that.”

EPA’s Clean Power Plan, announced June 2, would slash carbon dioxide emissions nationwide by an average of 30 percent over the next decade and a half, with interim goals effective starting in 2020.

The plan will be implemented through state or regional plans that meet state-specific carbon-reduction targets and will offer states vast flexibility in terms of strategies to meet the emission reduction goals.

The rule is an especially tough sell for many utilities in SPP’s 370,000-square-mile footprint, where coal produced more than 60 percent of the electricity used last year, and which, on average, will be required to reduce CO2 emissions by 38.5 percent by 2030.

Among the dozen states suing in federal court to block the proposed carbon rule are Oklahoma, Kansas and Nebraska, which are entirely or almost entirely within SPP’s footprint. Another, South Dakota, would become part of SPP with the planned addition of the Upper Great Plains Region of the Western Area Power Administration next year.

SPP said the proposed rule’s initial compliance date in 2020 is too aggressive for members to compensate for plant retirements with new generation and transmission projects, which can take 8½ years — a big part of why it is asking for a five-year extension.

But NRDC’s Moore said the request misses the fact that the interim goals that begin in 2020 are measured over a 10-year average. That opens the door for states with more modest CO2 reduction targets, in particular, to defer compliance until later in the decade.

In addition to asking EPA to delay the initial carbon plan compliance deadline, SPP called for technical conferences with EPA and the federal energy regulators focused on impacts to regional power markets and grid reliability, as well as a nationwide bulk power system study by the North American Electric Reliability Corp.

Nickell said the SPP study shouldn’t be taken to mean no new generation will be built. To the contrary, parts of the analysis were undertaken to demonstrate that new generation will be needed.

“We needed to show that, to demonstrate that,” he said.

Nor did the grid operator model a doomsday scenario for the purpose of criticizing the proposed rule, he said.

“We believe that we did a reasonably good job of representing or reflecting what could occur,” Nickell said. “It’s not as if we did something wild and crazy trying to show the worst case possible.”

See the article here.

 

Terry Jarrett: EPA’s Proposed Clean Air Rules Could Leave Nation in the Cold

Last winter, a polar vortex plunged much of the country into a deep freeze — and sent Americans running to turn up their thermostats. That, in turn, caused a surge of demand for electricity, a surge that our nation’s electricity suppliers could barely meet.

You may not give electricity much of a thought. For most Americans, you flip a switch and the lights go on. But if federal regulators get their way, that may not be the case in the future.

At issue is the concept of grid reliability, whether the supply exists to meet demand for electricity. For much of the country, grid reliability means counting on coal; today, roughly 40 percent of electricity in the United States comes from coal-fired generation.

Yet under new regulations from the Environmental Protection Agency, many of those plants would be effectively forced out of operation to be replaced by … nobody’s really sure, to be honest. Wind, solar, and natural gas have all been suggested, but none is capable of providing reliable and affordable electricity like coal can. Meanwhile, some parts of the country are able to rely on other sources like hydropower, but for much of the country that simply isn’t an option.

The ongoing necessity of coal was all too clearly demonstrated last winter, when it was coal that met that surging demand for electricity to keep the lights on as well as to heat homes and businesses. In fact, American Electric Power, a major utility company, later reported that 90 percent of its coal plants slated for retirement were running full speed just to meet that peak demand.

Natural gas couldn’t shoulder that burden, due in part to a shortage of infrastructure to deliver gas where it was needed — this despite record-setting production in the Marcellus Shale and elsewhere. But more importantly, whereas coal’s sole purpose is to generate electricity, natural gas is also used for home heating. And when push comes to shove, heating gets priority over generation.

Now, a recent report from PJM Interconnection, the regional transmission organization that coordinates the movement of wholesale electricity in all or parts of 13 states, including Pennsylvania, and the District of Columbia, has found that in the event of another polar vortex-like winter, without coal plants there could be insufficient electricity to meet peak demand.

At best, that means consumers would get walloped by massive electricity bills come spring; at worst, the grid would be so stressed that blackouts could occur. That means when you flip the switch, nothing will happen.

All of this is simply ignored by environmentalists — and the federal government — who want to force the country away from coal with no regard for the consequences. Coming on the heels of the PJM report, the EPA’s regulatory plan looks like nothing more than an effort to undermine the nation’s power grid.

The facts are clear. If we want to ensure that electricity remains affordable, reliable and abundant in the years ahead, we have to keep using coal for electricity. There’s simply no way around it. That’s why almost 20 former state public utility commissioners from across the country have written to state regulators and EPA, stressing the importance of a diversified power portfolio — including coal — that’s capable of meeting our nation’s electricity needs.

We believe that, rather than working to kill coal under the guise of improving air quality, EPA should admit that modern coal-fired generators are cleaner now than they ever have been. And with technology under development today, even cleaner coal plants will soon be attainable.

Instead, the EPA and allies like the Sierra Club are rushing ahead with a foolhardy plan that will effectively undermine our ability to generate reliable and affordable electricity in America. If, next winter, you flip the switch and nothing happens, you can’t say you weren’t warned.

Terry Jarrett, a nationally recognized leader in energy, utility and regulatory issues, served as a Missouri Public Service commissioner and chairman of the National Association of Regulatory Utility Commissioners’ Committee on Critical Infrastructure. 

Read the article here.

EPA to Close Record 72 GW of Power

More than 72 gigawatts (GW) of electrical generating capacity have already, or are now set to retire because of the Environmental Protection Agency’s (EPA) regulations. The regulations causing these closures include the Mercury and Air Toxics Standards (colloquially called MATS, or Utility MACT)[1], proposed Cross State Air Pollution Rule (CSAPR)[2], and the proposed regulation of carbon dioxide emissions from existing power plants.

To put 72 GW in perspective, that is enough electrical generation capacity to reliably power 44.7 million homes[3]—or every home in every state west of the Mississippi River, excluding Texas.[4] In other words, EPA is shutting down enough generating capacity to power every home in Washington, Oregon, California, Idaho, Nevada, Arizona, Utah, Montana, Wyoming, Colorado, New Mexico, North and South Dakota, Nebraska, Kansas, Oklahoma, Minnesota, Iowa, Missouri, Arkansas, and Louisiana.

See the full report here.

EPA Rule Will Hurt Businesses, Consumers

For years leading up to the release of the federal Environmental Protection Agency’s proposed rule limiting carbon emissions from utilities, environmentalists championed the talking point that states should expand renewable energy mandates and subsidies to “get ahead” of anticipated federal regulation. States such as Wisconsin and Minnesota made major investments in renewable production, energy efficiency and environmental improvements at fossil fuel plants. States such as Kentucky and North Dakota did very little.

A funny thing happened when the EPA announced its carbon regulations in June. Did the EPA reward Wisconsin’s efforts or ask states that had been sitting on the sidelines to step up their environmental game? Not really. Instead, states that had been at the forefront of environmental progress in their energy sectors, such as Wisconsin, were asked to do even more while others were given at least a partial regulatory pass.

This inherent inequity in the EPA’s proposal will make Wisconsin less competitive by requiring ratepayers here to spend billions of dollars on compliance, while businesses and consumers in states such as Kentucky may not. This concern is first and foremost in the minds of Wisconsin employers trying to digest this incredibly complicated new regulation.

When utility bills skyrocket in Wisconsin (and it’s not a question of if but of how much) will a plant manager here be able to justify a capital project to his bosses when electric bills are considerably lower in other states? How favorably will site selectors view Wisconsin when energy costs are significantly lower in parts of the country that aren’t as hard hit by the EPA’s proposal?

The state Public Service Commission has indicated that compliance costs in Wisconsin could be in the tens of billions of dollars. Our regional electricity grid operator, MISO, estimates compliance costs in their territory could reach $90 billion. That’s before taking into consideration the new transmission infrastructure necessary to implement the EPA’s plan.

Transmission is one factor that supporters of the EPA don’t like to mention. By necessity, compliance with the proposal will mean significant new power line projects to connect Wisconsin’s population centers with the wind resources in the west as well as new natural gas pipelines. The groups cheerleading for the EPA today are often the loudest opponents of infrastructure investment. Will they change their tune to allow Wisconsin to comply with the EPA’s mandates?

All of this might be tolerable if we knew our efforts would make a difference for our planet. Under the EPA’s best-case estimates, on Jan. 1, 2030, there will be 1.3% less carbon emitting into our atmosphere than if we were to do nothing. The entirety of that reduction will be offset around noon on Jan. 14 by China’s emissions alone. Another way to look at the problem: Every ton of CO2 we reduce in the U.S. will be met with 16 tons of increases in the rest of the world. The EPA is trying to apply a state-by-state solution to a global problem. It can’t work.

At Wisconsin Manufacturers & Commerce, our thousands of members are proud to invest in our environment. It’s just that in the case of the EPA’s carbon regulations, the only thing we appear to be investing in is our own uncompetitiveness. A recent op-ed by another business group argued for policies that promote jobs and the environment. We share that mind-set, but the EPA’s proposal costs dearly and promotes neither.

See the article here.

Report: EPA’s Clean Power Plan To Hit African-American Families Hardest

Environmental Protection Agency power plant regulations are projected to raise electricity prices in the coming years, forcing struggling families to pay more for energy. But African-American communities will be some of the hardest hit by the EPA’s “Clean Power Plan,” according to a new study.

The Pacific Research Institute reports that annual electricity spending for an African-American household in Ohio will rise from 4.5 percent of their income to 5.8 percent of their income due to the EPA’s plan to cut carbon dioxide emissions from power plants — an increase of $408 annually in energy costs.

“It’s the green movement’s new Jim Crow law,” Deneen Borelli, outreach director at FreedomWorks, told The Daily Caller News Foundation.

“These harmful regulations are going to drive blacks into government dependency,” said Borelli, who is an African American. “By harming the fossil fuel industry, you’re harming hard-working Americans.”

The EPA proposed a rule last June that aims to cut carbon dioxide emissions from existing power plants by 2030. The proposal is projected to raise electricity prices 6.5 percent as coal-fired power plants are shuttered, but the impacts will be even more pronounced in states heavily reliant on coal power. Ohio gets about 70 percent of its electricity from coal.

Since African-Americans families have smaller budgets on average than the average Buckeye State family, they would be hit disproportionately hard, which is worrisome since this group “is already suffering from stagnant incomes and high unemployment,” reads the PRI study. The average Ohioan family will see its energy spending increase too due to EPA rules, but only from 2.9 percent of their yearly income to 3.9 percent. African-American families saw their energy costs reach 5.8 percent of their income or higher.

“Households in lower-income African-American neighborhoods would be hardest hit with the cost of electricity equaling 26 percent of household income, or even higher,” reads the soon-to-be-released PRI study.

“This is really pushing the bounds of energy poverty,” lead author Dr. Wayne Winegarden told TheDCNF. “The impact on middle class families and poor shouldn’t be ignored.”

African-American groups have been split on their support for the EPA’s rule, which is part of President Barack Obama’s larger push to address global warming. The National Black Chamber of Commerce has warned that the EPA’s rule could “be devastating to small businesses” and would hit black-owned businesses “more directly, and more severely, than any other group.”

The NAACP, on the other hand, has fully backed the EPA’s Clean Power Plan. NAACP’s Interim President Lorraine Miller commended Obama and the EPA for “taking such a bold step for environmental justice in protecting our most vulnerable communities.”

“African Americans overwhelming live in areas where millions of tons of carbon pollution are trapping, concentrating, and intensifying the myriad of toxins they breathe every day,” Miller said. “And as we have witnessed with natural disasters like Hurricane Katrina and Sandy, which are part of a pattern of shifting climate conditions driven by power plant emissions of carbon dioxide, our black and brown communities are being hit first and the worst.”

Borelli, however, disagrees that shuttering coal-fired power plants will bring benefits to black communities. She argues that if the NAACP really cared about these communities it would not support the EPA rule.

“I see them as selling out black Americans,” Borelli said. “These are the elites, they can afford energy at any cost. They are harming those who can’t afford to pay for energy at any price.”

Winegarden notes that by driving up energy prices, the Obama administration may also drive more Ohioans, black and white, into energy poverty, requiring taxpayers to pay for these families just to keep the lights on — or the heat on during winter.

“Now you have to increase energy subsidies and increase government revenues to pay for this,” Winegarden said. “That means more tax revenues.”

According to Advanced Energy For Life, a project of the coal company Peabody Energy, about 115 million Americans currently qualify for energy assistance and “more than half of Americans have said that as little as a US$ 20 increase in utility bills would cause hardship.”

“African-American households will be disproportionately affected as well,” the PRI study reads. “The impact on African-American families will exacerbate the economic challenges confronting this demographic group, which is already suffering from stagnant incomes and high unemployment.”

Read the full article here.

EPA Regulations Limiting Carbon-Dioxide Will Lead to National Power Failure

Last month, a U.S. House science committee hearing on President Obama’s proposed greenhouse gas rules was interrupted when the lights in the room went out.

The irony was lost on no one.

If the Environmental Protection Agency’s regulations limiting carbon dioxide emissions are implemented, the result could be a slow-motion power failure for the United States.

The EPA’s rules will make it harder to produce energy and more expensive to buy it. This will mean fewer jobs for our workers and higher prices for their families.

My organization, Manufacture Alabama, represents hundreds of companies of all sizes and types. They create the technology, infrastructure and products that power our economy and, yes, protect the environment.

We already start at a disadvantage. High corporate tax rates and burdensome federal regulations make it significantly more expensive to manufacture in the U.S. than overseas.

But we enjoy a competitive edge in one area — energy. It’s abundant, cheap and reliable. This is especially true in states like Alabama, which rely on plentiful coal and inexpensive natural gas.

The EPA plan calls for a 30 percent cut in greenhouse gases by 2030. It would artificially and arbitrarily cap carbon dioxide emissions in Alabama and every other state, even during peak summer and winter months.

According to the National Mining Association, “Over 20 percent of the country’s coal-powered electricity [would be] removed from the energy grid by 2020, if not sooner.”

Recently, Alabama Power announced it would retire two coal-fired units and convert other units to natural gas. Jobs will be lost. So will power. These facilities were needed last winter to meet peak usage demands.

Americans insist on reliable energy. Coal currently meets about 40 percent of our energy needs. It doesn’t take a scientist to do the math.

There are other unintended consequences. The chemical industry is a major user of natural gas. Their products are the building blocks of nearly all manufacturing. When gas is diverted to replace coal, everything from toothpaste to automobiles will be affected.

Nationwide, the EPA regulations could cost 224,000 jobs annually and reduce GDP by over $50 billion a year, according to a U.S. Chamber of Commerce study.

“Regions of the country such as the South and Alabama will be more dramatically and adversely impacted,” wrote Gov. Robert Bentley in a letter to the EPA.

We’re already seeing the effects. The National Association of Manufacturers (NAM) has found a drastic reduction in construction permits caused in part by uncertainty related to the new rules. The group also predicts a cutoff of research and development investment in, of all things, environmental technology.

In the cruelest irony of all, by ceding energy production to high-polluting nations, we make it harder — not easier — to protect Planet Earth.

Climate change is a global challenge that calls for a global solution. China alone accounts for about one-fourth of the world’s CO2 emissions. A single coal plant in Taiwan emits more carbon dioxide than the country of Switzerland. Russia is in talks to build an even larger one.

President Obama told the United Nations last month that “there does not have to be a conflict between a sound environment and strong economic growth.”

He’s right. America has proven it by reducing carbon emissions to their lowest levels in 20 years — without the new EPA regulations.

But wouldn’t these regulations help us do even better? Not exactly. The EPA plan will “not impact the climate in any meaningful way,” testified Charles McConnell, President Obama’s assistant secretary of energy from 2011 to 2013.

And yet, he said, Americans on average will pay double for power, and in the top electricity-producing states like Alabama, “three times or four times more.”

Faced with growing public opposition, the EPA has extended the comment period to Dec. 1.

We urge the agency to use the time wisely by ending its micromanagement of energy and industry.

We ask that it “recognize the limits of federal authority,” as suggested by Gov. Bentley and 14 other governors.

We ask that it finally conduct a real world cost-benefit and economic sustainability analysis.

And we ask that the EPA not attempt to achieve through regulation what it could not by legislation — namely, an unpopular “cap-and-trade” bill.

At the U.N., President Obama pledged to “answer the call” on climate change. He’s also promised an “all-of-the-above” energy strategy.

The EPA’s plan achieves neither. And all Americans, manufacturers and consumers alike will likely pay the price.

George Clark

President, Manufacture Alabama

See the article here.

EPA Doubles Down on Last Winter’s Power Plant Outages

National Mining Association (NMA) President and CEO Hal Quinn today called attention to new findings by the North American Reliability Corp. (NERC) that 35,000 megawatts of electric generating capacity was temporarily idled during last winter’s cold snap. Of far greater concern, says Quinn, should be the Environmental Protection Agency’s (EPA) proposed Clean Power Plan that will double that volume of lost generating capacity – and with permanent rather than temporary plant retirements:

 “NERC shows us how nature played havoc with the reliability of the nation’s grid during last winter’s polar vortex. EPA, on the other hand, is creating permanent vortex conditions for our electricity grid from misguided federal policies that will do more lasting damage than Mother Nature. The polar vortex resulted in 35,000 MW of temporary outages, says NERC. But EPA rules are forcing the permanent outage of more than 60,000 MW of generating capacity. And that is even before the agency’s new Clean Power Plan forces more capacity out of the grid.

“The impact on consumers of these additional plant closures in future cold winters should be worrisome. According to a recent study commissioned by NMA, businesses and households would pay $35 billion more for natural gas and face rising wholesale power prices of between 27 to 55 percent across all regions of the country. If another cold winter is followed by an unusually hot summer, the impact worsens, with consumers paying $100 billion in higher electricity and natural gas prices.

“There are things we can do to lessen the impact of weather on electricity supply and power prices. And none is more important than stopping misguided policies from making matters worse.”

Read the release here.