Monthly Archives: May 2015

Coal Related News from Around the Nation

Wisconsin Governor: Obama Power Plant Rule ‘Unworkable’

Via The Associated Press/Yahoo News:

Wisconsin Gov. Scott Walker, a Republican eyeing a presidential run in 2016, says President Barack Obama’s plan to reduce pollution from coal-fired power plants is “unworkable.”

Wisconsin will not comply with the president’s plan without “significant and meaningful changes,” Walker said. Obama’s proposal is aimed at curbing the pollution blamed for global warming.

In a letter to Obama dated May 21, Walker complained that the proposed rule was “riddled with inaccuracies” and “questionable assumptions” that made it unworkable for his state. The Associated Press obtained a copy of the letter.

Wisconsin is among 15 coal-reliant states that are suing the Environmental Protection Agency to block the so-called Clean Power Plan, which would require states to cut carbon dioxide emissions by 30 percent by 2030.

Walker said in his letter to Obama that compliance with the rule could cost Wisconsin as much as $13.4 billion and raise electricity rates in the state by 29 percent.

In addition to those concerns, Walker also said the EPA may have exceeded its authority under the Clean Air Act by “attempting to regulate the entire electric generating system” in the United States.

Walker’s letter comes after Senate Majority Leader Mitch McConnell called for governors to defy proposed federal rules to limit carbon pollution. The Kentucky Republican wrote to all the nation’s governors in March urging them to stand against the rule, which McConnell called illegal and a job-killer.

Republican Gov. Mary Fallin of Oklahoma issued an executive order last month prohibiting the state from developing a plan to implement the EPA rule. Fallin said the federal government is overreaching its authority and that compliance would be costly.

A group of Democratic Senators has sent a letter urging governors to comply with the EPA rule and pointing out that McConnell’s home state is already drafting a compliance plan.

A spokeswoman for EPA Administrator Gina McCarthy said the agency fully expects states to develop their own plans to comply with the rule. The EPA is developing a model federal plan for states to use as an example.

See the article here.

Let States Opt-out of the EPA’s Clean Air Rule

Via The Patriot-News:

By John M. Stilley

Pennsylvania’s utilities, coal companies, employees and ratepayers are bracing for the publication of EPA’s final rule on greenhouse gas emissions set for this summer.

On behalf of my 120 employees and their families, I am hopeful that the EPA will consider the 1.6 million comments submitted during the open comment period, including those of opposition from Pennsylvania lawmakers, Public Utility Commission and Department of Environmental Protection (DEP).

Pennsylvania DEP forecasts that if the proposed rule is enacted as written, it will cut coal consumption by Pennsylvania’s electric utilities by about 70 percent, dropping from 33 million tons to a little over 10 million tons and undermining Pennsylvania’s position as an energy leader and exporter.

To destroy 70 percent of the coal industry is to destroy a sizable portion of the 36,000 jobs statewide that it supports, the more than $4 billion it provides to Pennsylvania’s economy annually and the baseload electricity necessary to keep electric rates low and attract businesses and manufacturing to the Commonwealth.

I applaud Congressman Mike Kelly, R-Pa., for acting on behalf of the men and women who elected him by cosponsoring the Ratepayer Protection Act of 2015 introduced last month by Congressman Whitfield, R-Ky.

This proposal would allow governors to reject the Clean Power Plan if they determine it will adversely affect their resident’s electric bills or their state’s electric reliability – which it will.

While the EPA promises that there will be enough electricity to maintain demand, the actual grid operators, utilities and public utility commissions have publicly opposed these rules stating there is not enough time to develop sufficient resources to meet demand and will result in double digit electric rate increases.

The North American Electric Reliability Corporation, an international regulatory authority established to evaluate and improve the reliability bulk power systems in North America stated, “The proposed timeline does not provide enough time to develop sufficient resources to ensure continued reliable operation of the electric grid by 2020. To attempt to do so would increase the use of controlled load shedding and potential for wide-scale, uncontrolled outages.”

We are the only nation that has reduced its carbon emissions in the last decade.

The “Clean Power Plan” will transform American energy use away from coal. Coal is one of the most affordable and reliable fuel sources keeping rates competitive and low. The cost of replacing this lost capacity will be passed on to the consumer. There are 2.4 million middle to low-income families in Pennsylvania and even conservative modeling projects double digit increases to electric rates. These families spend almost 20 percent of their after-tax income on energy. This is not a Republican or Democrat, industry or environment issue. This will affect every ratepayer and business owner in the Commonwealth.

Congressman Kelly is joined by elected officials across the country from both sides of the aisle concerned for their constituents.

The EPA is facing lawsuits and opposition from governors in 18 states, attorney generals in 22 states, the Public Utility Commission in 13 states, the Department of Environmental Quality in 21 states and legislative action in 18 states.

To date, this is the foremost demonstration of federal overreach, forcing a state energy policy disguised as environmental regulation. It has brought together bipartisan opposition at every level.

The unfortunate reality is that even if these commonsense measures were to succeed in overturning the EPA’s rule, the uncertainty created by the Obama Administration has caused stalled investments in research and development for carbon technology.

Because of the lack of available technology, these proposed greenhouse gas regulations are unachievable in the timeframe mandated.

Coal-fired power plants have already decreased other emissions by 85 percent per electric unit – meeting and exceeding past EPA regulated air quality emissions mandated by the National Ambient Air Quality Standards. This past track record of achieving standards demonstrate government and industry working together to set realistic goals so that the industry can continue to evolve and progress.

The global coal market is growing and the U.S. is unique that it has the capability to develop coal responsibly.

We are the only nation that has reduced its carbon emissions in the last decade.

There is opportunity to position our nation to export, profit and build our economy with coal as the foundation to become a global energy producer, exporter and leader.

Instead of picking energy winners and losers, the EPA should be working with the industry to establish attainable goals.

We are blessed with an abundance of this domestic resource and our government should encourage the continued responsible process of industry development for extraction and production.

John M. Stilley is president of Amerikohl Mining Inc. in Butler, Pa.

See the article here.


Proposed Law Protects State from Threat of Clean Power Plan

Via The St. Louis Post-Dispatch:

If it becomes the law of the land, the Environmental Protection Agency’s proposed Clean Power Plan will drive up the price of electricity in Missouri and lead to the destruction of good-paying jobs in energy-intensive industries like manufacturing. More than that, it would radically reshape the relationship between federal and state governments, removing decision-making about how a state generates electricity from the state Capitol to EPA headquarters.

Understanding the threat that CPP poses to Missouri’s economy, Sen. Roy Blunt recently co-sponsored the Affordable Reliable Energy Now Act, or ARENA. Under ARENA, state governors, including Gov. Jay Nixon, would have the power to opt out of the Clean Power Plan if they believe that it would harm their state’s economy. Just as importantly, ARENA would protect states that refuse to comply with the job-killing mandates of the Clean Power Plan from the all-too-real danger of federal retaliation.

Thanks to Sen. Blunt, Gov. Nixon could have the tools to protect Missouri’s economy from this latest egregious federal overreach, but will he take advantage of it?

Terry Jarrett  •  Jefferson City

See the article here.

Study: EPA Plan Will Further Hurt Coal

Via The Lexington Herald-Leader:

WASHINGTON — A new government analysis of President Barack Obama’s signature effort to fight climate change affirms what critics suspected: the proposal could further weaken an already battered coal industry.

Electricity generation from the carbon-intensive fossil fuel would fall by 90 gigawatts, more than twice the decline government analysts had predicted as recently as April, according to a report released Friday by the Energy Information Administration.

Most of the coal-plant closures would come by 2020, when the Environmental Protection Agency’s proposal to cut carbon dioxide emissions would kick in. Consumers may also take a hit as electricity prices would increase as much as 7 percent on average by 2025, partly because of the costs of building new power plants.

“In short, EIA confirms EPA’s rule is all pain, no gain — a symbolic gesture that continues the administration’s policy path for destroying high wage jobs for generations,” said Hal Quinn, chief executive officer of the National Mining Association, a lobbying group that represents companies including Peabody Energy Corp.

Coal, which has served as the backbone of U.S. electricity generation for decades, is in the middle of its worst downturn in decades amid competition from lower-cost natural gas and pressure to meet tougher emissions standards.

The Obama administration’s proposal, released in June, is not final. Supporters, including Sen. Maria Cantwell, a Washington Democrat, noted that the EIA projected the plan would cut carbon emissions from all U.S. power plants 25 percent below 2005 levels by 2020.

“As proposed, the Clean Power Plan will significantly reduce carbon pollution that will deliver climate and health benefits of up to $93 billion,” said Liz Purchia, a spokeswoman for the EPA.

The EIA analysis doesn’t consider possible health and environmental benefits. It predicts a minor impact on the U.S. economy overall. Gross domestic production could fall as much as 0.25 percent by 2040, assuming emissions are further restricted after 2030, the EIA said.

Purchia said the EPA is reviewing more than 4 million public comments and working to ensure the plan is affordable.

The EIA analysis found that coal production will decline 20 percent by 2020 and 32 percent by 2035, from a business-as-usual case.

Coal use has already been dropping, generating 37 percent of the country’s electricity in February — down from over 50 percent in 2007, according to the EIA. The market capitalization of the publicly traded U.S. coal companies has shrunk to about $19.4 billion from $78 billion in 2011, according to data compiled by Bloomberg.

Murray Energy Corp., the closely held miner that’s rapidly expanded amid the downturn, is now planning to lay off a quarter of its staff — about 1,800 people — at nine locations, according to a person familiar with the situation, who asked not to be identified Thursday evening because the information isn’t public.

Natural-gas use initially would replace lost coal, with wind power and other renewable energy sources taking a greater share of U.S. electricity production in later years, the EIA said.

Natural gas generation in April and May is predicted to have almost reached the level of coal use for the first time since April 2012, the EIA said in a short-term energy outlook on May 12.

While retail electricity prices are projected to increase as much as 7 percent on average from 2020 to 2025, in some regions the costs begin to recede to the EIA’s baseline levels by 2030. Electricity costs in the Southwest and Southeast may remain higher than without the EPA rule, according to the report.

Rep. Lamar Smith, a Texas Republican and critic of the EPA, requested the analysis from EIA.

Electricity generation from coal would fall by 90 gigawatts, more than twice the decline government analysts had predicted, according to a report released Friday.

See the article.


Proposed Regs Rile Power Companies

Via The Daily Tribune:

This summer, the Environmental Protection Agency is due to issue final rules on its Clean Power Plan and carbon pollution standards for new, modified and reconstructed power plants.

The plan has sparked protests from AEP/SWEPCO and other utility companies from across the country, who contend that the EPA is operating in the dark proposing this plan.

SWEPCO has issued statements that call the plan’s timeline “aggressive and unworkable,” and state that the plan threatens recent investments.

“The investment of billions of dollars in these plants to meet other EPA requirements over the past decade would be prematurely lost,” SWEPCO reported to EPA in summary statements on the plan, and cited that the plan would result in “SWEPCO’s system reliability and $900 million investment in current retrofit projects at four plants (including the Welsh plant located in Cason, Titus County) to be prematurely lost.”

The EPA has cited carbon pollution from existing power plants as the single largest source of carbon pollution in the United States.

According to the EPA, power plants account for roughly one-third of all domestic greenhouse gas emissions in the U.S.

When the EPA proposed the Clean Power Plan last June, the statement was issued with the plan that, while there are limits in place for the level of arsenic, mercury, sulfur dioxide, nitrogen oxides and particle pollution that power plants can emit, there have been no national limits on carbon

pollution levels.

By 2030, according to the EPA plan, the Clean Power Plan’s compliance measures should result in a reduction of carbon emission from the power sector by 30 percent nationwide, below 2005 levels; cut particle pollution, nitrogen oxides and sulfur dioxide by more than 25 percent,  and shrink electricity bills roughly 8 percent by increasing energy efficiency and reducing demand in the electricity system.

By 2030, according to EPA, the measures will “avoid up to 6,600 premature deaths, up to 150,000 asthma attacks in children and up to 490,000 missed work or school days – providing up to $93 billion in climate and public health benefits.” 

The summer of 2016, EPA has set as the due date for states to submit compliance plans to EPA with extension requests. Next summer the EPA has stated the agency will be in a position to issue a final federal plan for meeting Clean Power Plan goals in areas that do not submit plans.

This coming July, EPA is scheduled to issue final rules on the Clean Power Plan for existing power plants and for new, modified and reconstructed power plants; and propose a federal plan for meeting the Clean Power Plan goals for public review and comment.

According to the EPA website, the Clean Air Act Section 111(d) of the Clean Power Plan for existing power plants was proposed by EPA June 2, 2014:  for reduction of carbon dioxide emissions from existing power plants with a goal of 30 percent reduced emissions by 2030.

By the time the agency’s extended comment period on this proposal ended, Dec. 1, 2014, EPA reports receiving more than 2 million public comments. 

American Electric Power and Southwestern Electric Power companies report they are participating fully in the federal and state processes to protect customers and reliability of the electric grid. 

But SWEPCO urged its stakeholders to ask EPA to “reconsider and modify its unrealistic assumptions; extend its schedule to allow a reasonable opportunity for compliance and allow flexibility for continued operation of base load generation as needed to support reliability.”

“SWEPCO, AEP and many other utilities across the U.S. have submitted thousands of pages of comments on 111(d).  Hopefully the EPA will be reasonable and relax the unrealistic deadlines to meet the plan as written now, which call for our Welsh and Pirkey plants to close by 2020,” AEP/SWEPCO spokesman Scott McCloud said.  

AEP submitted 400 pages of comments to the EPA on the plan, he said.

Some 5,200 Welsh Power Plant employees, contractors, retirees and customers sent comments to EPA by their comment deadline at years-end 2014, protesting the EPA demands on the plant, the timetable and financial investments required, according to McCloud.

The AEP/SWEPCO Welsh Power Plant, located in Cason, is a base loaded, coal-fueled power plant that generates 28 percent of SWEPCO’s capacity with a net value of $247 million for all three units, according to AEP/SWEPCO reports. 

The plant reportedly burns low-sulfur coal from Powder River Basin, Wyo., shipped by rail; reports 133 employees and an annual payroll of $9 million, annual property taxes of $4.147 million.

“At Welsh, EPA’s Clean Power Plant and carbon pollution standard requirements will affect some 133 SWEPCO employees with layoffs, with additional employment effect to local contractors, and impact the $4.125 million in local taxes, including $2.6 million for Daingerfield-Lone Star ISD and $235,000 to Northeast Texas Community College; and $278,000 in Texas state taxes the plant currently pays,” McCloud said.

“To comply with the stringent new U.S. Environmental Protection Agency regulations, AEP/SWEPCO is investing $411 million to install additional environmental controls at Units 1 and 3 of the coal-fueled Welsh Power Plant,” according to McCloud.

“The generating capacity of each unit is 528 megawatts. Unit 2 is scheduled for retirement by April 2016,” he said.

McCloud listed AEP/SWEPCO’s primary concerns regarding the proposed carbon dioxide emissions reduction plan center on the EPA’s proposed demands as “being too high.” 

“The rule requires emissions rate reductions of 45 percent in Arkansas, 40 percent in Louisiana and 39 percent in Texas, much higher than EPA’s nationwide goal of 30 percent by 2030. The EPA’s analysis reveals a severe impact,” he said.

According to the impact summary statement AEP/SWEPCO submitted to the EPA, “SWEPCO is currently investing $900 million in environmental retrofit projects to comply with existing EPA regulations by 2015-2016. The projects are necessary to keep the lights on across SWEPCO’s system. EPA’s proposed rule places those protects and system reliability at risk.”

“Across the nation, EPAs aggressive compliance time line is projected to force the retirement of massive amounts of generation capacity in less than five years. The time line will not allow adequate time for the planning, siting, permitting and construction required for replacement generation and transmission,” according to the summary statement.

Ultimate increases in the price of electricity from the higher costs replacement generation and transmission needed to maintain reliability, were cited in the summary statement.

“EPA’s ‘building blocks’ are plagues with problems that set unrealistic targets for power plant operations, renewable energy expansion and customer energy-efficiency increases,” according to the statement.

The summary states the proposed rule “reaches far ‘outside the fence’ of power plant operations, seeking to control resource mix and electrical usage because carbon dioxide controls at the power plant level are not available.”

Included in the SWEPCO arguments are statements that the ramping up of customers’ energy efficiency levels 1.5 percent annually are unrealistic considering that the most cost-effective efficiency improvement –  lighting – is already occurring through newly-adopted federal lighting standards.

“EPA’s analysis predicts that 46,000 to 49,000 megawatts of coal-fueled generation will be shut down no later than 2020 as a result of this proposal – in addition to more than 60,000 that will already retire this decade. That means about one-third of all existing coal-fueled power plants, enough generation to power 60 million homes, would be gone in just five years. The EPA estimates that most of these combined retirements (about 110,000 megawatts) will occur by 2016,” SWEPCO has stated.

“For SWEPCO, EPA assumes that 2,200 megawatts of 24/7 base load generation (Pirkey and Welsh Units 1, 2 and 3) are shut down by 2020, and another 1,000 megawatts (Turk, Flint Creek and Dolet Hills) will run less because they will be dispatched according to EPA’s new priority for natural gas combined cycle plants,” SWEPCO reported to EPA.

“Closing this much generation in such a short time frame raises serious concerns about the ability to maintain reliability and meet peak demand, particularly in periods of extreme weather – across the nation and especially at SWEPCO,” the SWEPCO report summary to EPA states.

Another retrofit project underway at Welsh is driven by the EPA’s new Mercury and Air Toxics Standards rule, McCloud said. 

“Construction and modification efforts are well underway at Welsh to meet EPA compliance for MATS by April 2016,” he said.

That technology consists of activated carbon injection to reduce mercury emissions and pulse jet fabric filter (commonly called baghouse) to capture carbon and mercury, according to McCloud, and that project includes a new 531-foot-tall stack. 

See the article here.

Proposed EPA Carbon Rules Will Mean Higher Bills and Fewer Coal Plants, New Report Says

Via The Wall Street Journal:

A new report released Friday by the U.S. Energy Information Administration is reinvigorating a common debate in Washington over how to calculate projected economic impacts of regulations.

The report, written at the request of House Science and Technology Chairman Lamar Smith (R., Texas), concludes that a proposed Environmental Protection Agency rule cutting carbon emissions from power plants will, by 2020, cause electricity prices to go up by 4.9% and drive more than double the amount of coal-fired electricity to go offline than what EIA predicts would occur without the rule.

That sounds a lot like the criticism coming from congressional Republicans and the energy industry, both of whom are fighting the rule and are pointing to EIA’s report as evidence it will hurt the economy.

Looking closely at the numbers shows a more complicated picture.

First, the basics of the rule: Proposed in June 2014 and expected to become final in August, the draft EPA rule calls for a 30% cut in power-plant carbon emissions by 2030 based on emissions levels in 2005. It’s the centerpiece of President Barack Obama’s efforts to address climate change, which he hopes to leaves as a legacy of his time in the White House.

The two agencies agree that electricity prices—how much you pay per kilowatt hour on your electricity bill—will go up under the rule. The two agencies diverge over how much energy efficiency and lower electricity demand will affect electricity bills, which is the number of kilowatt hours you use times the retail electricity price and represents ultimately how much you pay.

EIA predicts that under the rule, retail electricity prices will go up by 4.9% by 2020 and 4% by 2030. That’s a little lower than what EPA projects will happen in an economic analysis it released alongside the proposed rule in June. It said then that electricity prices would go up by between 3.6% and 6.5% by 2020 and between 2.7% and 3.1% by 2030.

EPA predicts that electricity bills that households must ultimately pay will rise between 1.1% and 3.2% by 2020 but ultimately decrease by up to 8.7% by 2030, driven by energy efficiency and lower electricity demand.

EIA, on the other hand, predicts electricity bills will rise by 3% by 2030 even considering energy efficiency and lower electricity demand.

“The issue is how much demand reduction occurs because of energy efficiency programs,” said Howard Gruenspecht, deputy administrator of EIA, on Friday. “In our framework, we let the modeling drive that and we just didn’t get that much of a reduction in residential and commercial energy demand as EPA did.”

The other headline-catching statistic was about how many coal-fired power plants will be retired, a common point of contention that gets at the heart of what congressional Republicans decry as Mr. Obama’s “war on coal.”

The EIA report found that under EPA’s proposed rule, projected retirements of coal-fired electricity between now and 2040 would be 90 gigawatts, with most of that going offline by 2020. EIA currently estimates that 40 gigawatts of coal electricity will retire by 2040 without EPA’s rule, driven by cheap natural gas prices and other EPA rules.

In its analysis released last year, EPA predicted that between 46 and 49 gigawatts of coal electricity would be retired under its carbon rule by 2030, which would be on top of the retirements already expected under the business-as-usual scenario laid out by EIA, which is the 40 gigawatts of retiring coal.

In other words, EPA predicts that between 86 and 89 gigawatts of coal will be retired over the next several years under its climate rule, which is nearly identical to what EIA predicted in its report Friday.

For context, the total capacity of the U.S. electricity system in February was approximately 1,000 gigawatts, according to EIA data, so we’re talking about 9% of the electricity grid.

See the article here.

Coal Plant Shutdowns Predicted to Double Under EPA Climate Rule

Via The Hill:

Shutdowns of coal-fired power plants would more than double under the Obama administration’s landmark climate rule, a federal analysis found.

The rule is also projected to increase electricity prices 4.9 percent above what they would be without it.

The Environmental Protection Agency’s (EPA) carbon limits for power plants are projected to cause 90 gigawatts of coal plant capacity to retire by 2040 so that states can comply, the Energy Information Administration (EIA) projected Friday.

That is more than double the 40 gigawatts that the EIA, the independent data arm of the Energy Department, predicted would be shut down in that time period if it weren’t for the climate rule. The United States currently has 1,212 coal-fired power plants with a total capacity of 329.8 gigawatts.

The report could provide new evidence for opponents of the rule such as Republicans and fossil fuel interests. They have argued that the Obama administration would significantly raise electricity costs, close numerous power plants and kill the jobs of the people working there and in related fields.

Nearly all of the plant shutdowns would happen by 2020, the year of the first set of standards in the EPA’s rule. Another standard takes effect in 2030.

“Switching from coal-fired generation to natural gas-fired generation is the predominant compliance strategy as implementation begins, with renewables playing a growing role in the mid-2020s and beyond,” the EIA said in its analysis.

Complying with the rule would require a “significant investment in electric transmission system infrastructure to integrate renewables from remote areas,” the agency said.

Those investments, among other costs, would increase electricity prices 4.9 percent in 2020, 4 percent in 2030 and 2.6 percent in 2040, all in comparison to a situation without the rule.

The EIA also warned of potential reliability problems from moving more toward renewable energy sources, which are mostly intermittent in nature.

It’s the first comprehensive report on the EPA rule from a government entity other than the EPA.

An industry-commissioned report from Nera Economic Consulting found last year that the rule could cost at least $366 billion over 15 years, and could cost businesses and consumers $41 billion annually.

The Nera study said the rule would shutter at least 45 gigawatts of coal-fired generating capacity.

The North American Electric Reliability Corp. concluded that the rule could harm grid reliability.

The Friday report, however, also found a number of positive benefits from the regulation.
It predicted that carbon emissions from the power sector in 2030 would be 29 percent to 36 percent below 2005 levels, in line with the EPA’s coal of a 30 percent cut.
Although electric prices would be higher, the bills that consumers and businesses pay in 2040 will be “slightly below” what they would be without the plan, due to factors like energy efficiency and reducing demand.
The plan would also spur a great deal of renewable energy installation. Renewable energy capacity under the rule would grow 160 percent above what it would otherwise be by 2040, at 174 gigawatts.
“Wind power plays an important role in Clean Power Plan compliance, with wind electricity generation capacity more than tripling over 2013 levels by 2040 in the Base Policy case,” it said. Solar power is projected to have 136 gigawatts, versus 76 without the plan.
The EIA’s report does not analyze potential health and climate benefits of the rule.
EPA spokeswoman Liz Purchia said her agency “appreciates EIA’s work to develop this assessment based on the agency’s proposed Clean Power Plan, and the agency will be reviewing the assessment as we work to develop the final rule.”
She pointed to numerous limits in the EIA’s analysis, including that it was based only on the proposed rule and that, since it does not examine benefits, it paints an incomplete picture.
The EPA is planning to release a final version of the regulation in August.
The National Mining Association said the report confirms the concerns industry and other businesses interests have long had.
“It contradicts claims by the Environmental Protection Agency (EPA) that its Clean Power Plan will help their economy,” Hal Quinn, the mining group’s president, said in a statement. “And it confirms that this costly power plan will ‘lock-in’ a more expensive and risky energy future for their citizens.”
See the article here.

Louisiana Leaders Should Fight EPA Overreach on Carbon Emissions

Via The Times-Picayune: 

As state leaders meet in Baton Rouge for the legislative session, federal bureaucrats thousands of miles away are moving forward with an unprecedented incursion into Louisiana’s affairs. In just a few months, the U.S. Environmental Protection Agency is expected to finalize a rule requiring states to drastically reduce carbon dioxide emissions, with the goal of closing affordable coal-fired power plants, mandating costly renewables and imposing a backdoor cap-and-trade system.

At stake is whether Louisianans can continue to make our own rational and efficient energy choices, or cede our authority to the federal government.

Historically, states have taken the lead in regulating retail electricity markets. This autonomy has allowed Louisiana to achieve the fifth most affordable electricity prices in the country, the benefits of which ripple throughout the economy.

But now the federal government is trying to become Louisiana’s energy czar, which would mean higher energy prices, fewer jobs and more poverty.

The EPA’s rule would impose severe burdens on Louisiana families. For instance, a recent study we conducted with economists at the Beacon Hill Institute found that the rule would increase electricity rates by 22 percent, reduce disposable income by almost $2 billion and destroy tens of thousands of jobs.

The tragedy of this federal scheme is that it would inflict the most harm on those who can least afford it. The EPA’s rule would have a disproportionate impact on the poor, elderly and minorities, who spend a higher share of their household budgets on energy costs. In fact, Louisiana households in the lowest income bracket spend 70 percent of their after-tax income on energy, compared to 9 percent of families in the highest income bracket.

Forcing Louisianians — particularly poor families — to pay more for electricity would destroy jobs and exacerbate poverty at a time when many residents are struggling to make ends meet. The state’s unemployment rate sits at 6.6 percent, fourth-highest in the country. Meanwhile, median household incomes are lower now than 2007, the year before the Great Recession.

For all that economic pain, there’s little environmental gain. The EPA’s own models show its rule would reduce global warming by just 0.02 degrees. Furthermore, the pursuit of this trivial reduction could destabilize the electricity grid by reducing generating capacity.

Still, the EPA plows ahead. The agency is pressuring states to submit detailed plans to show how they intend to comply with the rule. While the EPA claims its rule gives states “flexibility” to comply, this couldn’t be further from the truth.

If finalized as written, the EPA’s rule would replace the established tradition of state autonomy in this area with federal mandates, such that Louisiana could regulate electricity among utilities only with the EPA’s approval. As Federal Energy Regulatory Commission Commissioner Tony Clark has explained, “[States] will have entered a comprehensive ‘mother may I?’ relationship with the EPA that has never before existed.”

One would think utilities would be the first to oppose regulations that force them to produce energy from more expensive sources. However, instead of fighting the rule, many utility executives are working with the EPA because they can simply pass on their costs to consumers. It’s similar to how the Obama administration co-opted insurance companies to support the federal health care overhaul even as many knew it would make insurance more expensive.

Louisiana needs bold leaders to fight the EPA’s overreach. The attorney general has joined a lawsuit challenging the constitutionality of the proposed rule, while U.S. Sen. David Vitter, a gubernatorial candidate, has commented that EPA’s rule “bullies states.” But action counts more than rhetoric. We hope these and other state leaders advance concrete solutions that protect Louisiana families from this costly intrusion into state affairs.

Kevin Kane is president of the Pelican Institute for Public Policy in New Orleans.

See the article here.

EPA’s Gift Horse – Governors Have A Better Choice

Via The Daily Caller:

This spring, as coal companies, their employees and suppliers are hammered by a weak market, the Obama administration is proposing a new carbon rule to finish them off. While the coal industry is most exposed to the coming damage from EPA’s Clean Power Plan, the pain is coming for others too. A nation snoozing through an endless presidential campaign, comforted by low gas prices, is about to be rudely awakened to the prospect of higher utility bills.

Later this summer our president’s central planners will unveil the centerpiece of his pledge to reduce U.S. greenhouse gas emissions.  EPA’s plan sets a carbon reduction target for each state that promises to reduce total U.S. emissions by 30 percent by 2030. A mid-term progress requirement means states have to hop to it. If they don’t, EPA is threatening to impose a federal plan.

But hop to what? The agency is asking states to adopt four “building blocks” to meet their emissions goal. And yet, energy and legal experts are telling EPA that each block – fuel switching, improved energy efficiency, better plant performance, more renewable energy infrastructure – is implausible and unrealistic. Some legal scholars, including the president’s former law professor, say the plan is even unconstitutional.

And of all of this pain for what? While U.S. carbon emissions may fall, at tremendous cost to U.S. consumers, global emissions will not. Whatever gains the U.S. makes will be quickly overwhelmed by voracious energy appetites in developing nations where electrification, rightfully, takes precedence.

It’s as if the Clean Power Plan carries a warranty that in fine print reads: This plan won’t work at a cost your state can afford, achieves no meaningful environmental benefit and may be unlawful.

EPA waves off these criticisms but governors shouldn’t. By accepting the plan’s onerous conditions, states become victims in EPA’s version of “The Hunger Games.” No combination of building blocks will allow a state to survive higher electricity prices, weakened grid reliability and constant harassment by activists and EPA lawyers eager to enforce state plans in court.

Luckily, governors have a better choice. They need to call the agency’s bluff — decline the state plan and let EPA try to impose those costly conditions through a federal plan. The Clean Air Act gives EPA far less authority to push states around with a federal plan than it has through a state plan it wants governors to accept. Taking the federal plan, households and businesses will pay only for improving power plant efficiency, not the far higher price tag for upending the state’s entire power grid that comes with a state plan.

EPA’s legal and technical competence is too weak to take over the state’s grid, so it relies on cunning. Think of the state plan as EPA’s version of the Greeks’ Trojan horse, a “gift” to states – full of “options” and “flexibility,” says the agency. But a state that adopts it also brings inside its borders costly, federally-enforceable strictures – strictures EPA can’t legally impose from without.

We know what happened in The Iliad when Troy failed to “beware Greeks bearing gifts” and pulled the horse inside the city’s walls. Any state that accepts EPA’s gift will suffer a similar fate.

Luke Popovich

See the article here.

Federal Coercion and the EPA’s Clean Power Plan

Via The Atlantic:

When Congress is deadlocked on some urgent issue, such as climate change, presidents often insist that they must be able to act, even if doing so means doing things that neither Congress nor the Constitution’s drafters ever explicitly authorized. But does the danger to be salved justify the danger of departing from constitutional government?

In the case of the EPA’s new Clean Power Plan, the answer is clearly “no.” The plan requires states to reorganize their electrical power mix and electricity usage, matters that EPA has no statutory power to regulate directly, in order to eliminate the coal-fired power generation that it can regulate directly. There is debate about the plan’s constitutionality, but none whatsoever about its lack of benefits. The EPA itself admits that the plan’s utility against the threat of climate change will be so small (reducing warming by 0.016 degrees Fahrenheit over the next century) that it will be impossible to measure.

Even a trivial risk to the Constitution might seem to outweigh a trivial benefit. And the risks here are anything but trivial, worse than even the plan’s opponents have fully grasped. Harvard Law Professor Laurence Tribe, an Obama mentor, has attacked the plan, as David Graham recently explained:

Tribe argues that the rule violates the Fifth Amendment because it constitutes a regulatory “taking” by the federal government, limiting a corporation’s use of its coal plants without due compensation, and that it violates the Tenth Amendment by coercing states into creating their own CO2 reduction plans or else risking the federal government imposing its own plan.

The whole scheme of cooperative federal-state regulations also raises major constitutional questions. When the EPA says to the states, in effect, “develop a plan to implement our new regulation, or we will impose a federal plan, and you won’t like it,” it is inherently coercive. But that’s the way the Clean Air Act is structured, along with a host of other federal programs. The Supreme Court, though, has thus far taken a permissive view of this de facto federal takeover of the functions of state government.

But the problems with the Clean Power Plan go deeper. Normally, when the EPA threatens to impose a federal plan, it actually has the statutory authority to do what it’s asking the states to do. The coercion (or “encouragement” as the Supreme Court prefers to call it) occurs within a field of concurrent federal-state jurisdiction. But the Clean Power Plan is missing that essential ingredient. Even the EPA admits that it has no statutory authority to impose directly the measures it’s asking states to take.

Here’s how the Clean Power Plan works. Under Section 111(d) of the Clean Air Act, the EPA is empowered to designate a “best system of emissions reduction” (or “BSER”) for facilities that emit certain pollutants. (The EPA may also face legal challenges as to whether it can even regulate carbon emissions under Section 111.) Normally, the “BSER” is a “scrubber” or some other technology that physically reduces emissions at the source facility. But the EPA’s creative lawyers have discovered almost infinite elasticity in the concept of a BSER. The agency wants to tailor them to rework each state’s mix of electric generation and consumption, matters that the Federal Power Act leaves to the states and, in a few cases, to the Federal Electrical Regulatory Commission.

The core of the Clean Power Plan is the EPA’s attempt to reduce carbon emissions at electric-generating plants. The BSER consists of four baskets, or “blocks,” of measures that states must take in order to reduce coal-fired electrical generation. These measures include costly and ambitious improvements in emissions rates from coal-fired power generation (Block 1); the replacement of coal-fired electrical generation with natural gas (Block 2) and renewable sources (Block 3); and significant limits on electricity use by consumers (Block 4). Of these, as the EPA admits, only Block 1 is something that EPA could ordinarily impose directly under the Clean Air Act.

To get around that, the EPA is requiring states to develop plans for implementing the BSER, subject to its approval. If states don’t file approvable plans, then the EPA is required to file a federal plan. And here’s the constitutional problem: The EPA does not have, and does not claim, the authority to do under a federal plan what it’s asking states to do under their own plans.

So the EPA has given itself an out, in the form of an “alternative approach” to the BSER. The proposed regulation states that under this “alternative approach”:

[B]locks 2, 3, and 4 would not be components of the system of emissions reduction but instead would serve as bases for quantifying the reduced generation (and therefore emissions) at the affected [Electrical Generating Units], and assuring that the amount of reduced generation meets the criteria for the ‘best’ system that is ‘adequately demonstrated’ because, among other things, the reduced generation can be achieved while the demand for electricity services can continue to be met in a reliable and affordable manner.

There is a remarkable power-grab hidden inside this nearly unintelligible piece of legalese. This “alternative approach” would allow the EPA to shut down the same amount of coal-fired power generation that could be shut down under an approvable state plan, even if the state declines to file such a plan. It would still be a valid BSER, according to the EPA, because the existence of a BSER for “state plans” establishes that “demand for electricity services can continue to be met in a reliable and affordable manner.” If the same amount of coal power is simply shut down under a federal plan, states can always make up the lost demand by implementing the BSER on their own.

In other words, if a state doesn’t willingly adopt a host of measures that the EPA has no authority to impose on its own, the EPA will simply shut down a large fraction of that state’s electrical generation. And then, in order to continue meeting the demand for electricity, states will have to adopt those very measures anyway. This is the devil in the details of the Clean Power Plan: States have to implement the BSER required of a “state plan” whether they file a “state plan” or let the EPA impose a federal one. Their choice is not between a state plan and a federal plan, but rather between potentially skyrocketing electric rates, and a potentially catastrophic disruption of electrical generation that could leave cities and whole regions in total darkness.

The EPA is probably bluffing. It would probably try to implement any shutdowns incrementally, targeting the coal plants it sees as the worst offenders, in regions where alternative sources of electricity are readily available. But none of that changes the constitutional implications, which pose significant risks to the federal structure of the Constitution, the principle enshrined in the Tenth Amendment.

In New York v. United States, the Supreme Court held that “a choice between two unconstitutionally coercive regulatory techniques is no choice at all. Either way, the Act commandeers the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program, an outcome that has never been understood to lie within the authority conferred upon Congress by the Constitution.” In this case, the compulsion is not direct, but it is no less compelling.

In a recent Politico column, law professors Jody Freeman and Richard J. Lazarus, leading proponents of the Clean Power Plan, claimed that the Tenth Amendment argument is “a non-starter”:

The 10th Amendment protects the states from being forced to use their institutions to implement federal requirements. But the EPA’s federal implementation plan will require only that power plants meet their targets. It will not force the states themselves to do anything.

The rule may not legally require states to do anything, but it certainly does force them to do a lot of things. The Supreme Court draws a line between those forms of federal coercion that it considers “mere encouragement” and those that amount to a “gun to the head.” And the implied coercive threat of leaving states unable to meet their needs for electricity might well lead federal courts to find “a gun to the head” of state governments in the EPA’s proposal. It’s not for nothing that even the reddest of states are busy figuring out how to protect their citizens—and not just their coal-fired power plants—from the consequences of the rule.

One thing the plan’s proponents are losing sight of is the fact that Congress considered, and rejected, the president’s cap-and-trade scheme, notwithstanding Democratic supermajorities in both chambers. The EPA has now figured how to impose it anyway, turning one of the most obscure and little-used provisions of the Clean Air Act one of the most ambitious regulations in the history of the administrative state.

Congress has arguably empowered the president to take those very liberties, through excessive delegations of legislative authority to executive agencies. In 1984 the Supreme Court expanded that delegation almost beyond democratic control with its decision in Chevron v. NRDC, which established near-absolute deference to an executive agency’s interpretations of its own enabling statute—even when the result is to aggrandize the agency’s own power.

Chevron has opened the door to a kind of government that defenders of the EPA may regret—particularly if the other side wins the White House and resorts to the same tactics, pushing through its agenda despite opposition from a congressional majority or even supermajority, so long as the president can maintain 34 votes in the Senate. In the meantime, perhaps the Clean Power Plan will have one important benefit from its detractors’ point of view, in demonstrating the very real dangers of absolute deference to executive power.

See the article here.

EPA Power Grab Looks Like Obamacare Redux

Via The Washington Examiner:

Everyone remembers former House Speaker Nancy Pelosi’s ill-advised comment that the Affordable Care Act would have to pass so that the American people could find out what was in it. Unfortunately, what should have been a cautionary tale has instead been an object lesson in rulemaking for President Obama’s bureaucracy.

Take, for example, the pending Clean Power Plan, an initiative of the Environmental Protection Agency. If fully implemented, it could lead to the mass shuttering of existing power generation facilities, rolling brownouts, blackouts and a significant increase in electrical rates.

House Energy and Commerce Chairman Fred Upton, R-Mich., opposes the initiative because, like Obamacare, it represents an effective federal takeover of a major sector of America’s economy.

“EPA’s proposed new regulations for existing power plants cap off a comprehensive federal regulatory agenda aimed at electricity generation and use,” Upton said in a hearing last year. “But this is not the first Obama administration takeover of a major sector of the economy. That distinction goes to the Affordable Care Act, and we are only beginning to see what a disaster that is turning out to be,”

Upton had watched original plans for Obamacare pass through his committee when Democrats controlled it. On its way to Obama’s desk, it was shaped and reshaped by backdoor deal making, input from influence peddlers and special interests, and academics who had designed the original framework in secret lest anyone misunderstand (or figure out) what they were doing. Almost everyone had a voice in what the final proposal would look like except the people who would ultimately have to live under it, facing higher costs, higher upfront deductibles and expensive mandates.

The parallels between the process that produced Obamacare and the one being used to develop the Clean Power Plan are strong — with one significant exception. The new healthcare law was at least the product of Congress, making those who wrote it and voted for it accountable to the people who put them in office. EPA, on the other hand, is acting behind closed doors, in possible contravention of existing laws and regulations, and without oversight or accountability.

This alone is enough to rattle the chains of some legislators. “With this proposed rule, EPA — an agency with no energy policy authority or expertise and under questionable statutory interpretation — has now placed itself above state governments and public utility commissions on electric generation issues, not to mention the DOE, FERC, and other federal agencies,” Upton said at the same 2014 hearing.

Again, this sounds a lot like Obamacare — where ivory tower health policy experts and economists like MIT’s Jonathan Gruber were allowed to let their judgment supersede that of people who knew how doctors and hospitals function, and why health care costs were really so high.

EPA is using the phantom issue of global climate change to establish hegemony over the way electricity is produced. There is no law on the books that allows them to do this — electricity regulation historically being a matter for the individual states to handle. But the agency and the bureaucrats who work there have an agenda: stop the production of electricity through conventional sources in order to reduce carbon emissions, in the naïve belief that our competitors in the global economy will all do likewise in the best interests of humanity. The practical meaning of this is as lost on EPA as the impact of Obamacare was on those responsible for bringing the health exchange website to life.

The EPA is no better positioned to deal with power generation issues than my dog is to pitch for the New York Mets. Fortunately, there’s still time to stop another major mistake from being made. Congress can prevent EPA from moving forward by cutting off funds for the Clean Power Plan effort. Meanwhile, as Senate Majority Leader Mitch McConnell, R-Ky., has suggested, states should “just say no” to this regulatory onslaught. If they don’t, and the EPA succeeds in its objectives, we’ll all be sitting in the dark, wondering what happened.

Peter Roff is a senior fellow with Frontiers of Freedom.

See the article here.


EPA and the Grid

Via the Pittsburgh Post-Gazette:

I wish to add some perspective to the May 5 letter “The EPA’s Plan Doesn’t Threaten Electrical Service.” The claim this title makes is patently false.

PJM Interconnection is the electric grid operator for Pennsylvania and several surrounding states. The vast majority of baseload generation units in the PJM footprint are either nuclear or use coal as a fuel source. Due to a generous federal subsidy for renewable generation, EPA regulations that make coal units prohibitively expensive to operate, and an annual wholesale electric power auction structure that intentionally does not value generator availability during fuel source interruption, more than 50 percent of all PJM merchant baseload generators are not expected to be able to cover their costs to operate in the coming years. This is problematic, since baseload generation — vital to maintaining the reliability of the electric grid — cannot be quickly or easily replaced with gas or renewables. Thus, the claim made in the headline of the May 5 letter is not true.

It is important to note that coal and nuclear generators have on-site fuel storage, which makes them immune to short-term fuel interruptions, unlike gas-fired generators.

Renewables such as wind and solar are highly impacted by unpredictable weather and thus cannot be reliably held to a voltage schedule, which is essential for maintaining grid stability. Thus they are not viable baseload technologies.

The discussion of electric grid operation today is sadly dominated by too many folks who have little knowledge of such.

See the article here.

WV Lawmakers Show Support for Federal Measure to Roll Back Clean Power Plan

Via The State Journal:

Several West Virginia lawmakers gathered May 18 to support the Affordable Reliable Energy Now Act, which aims to roll back proposed federal regulations on coal-fired power plants.

Senate President Bill Cole, R-Mercer and Speaker of the House Tim Armstead, R-Kanawha, among several other lawmakers, came together at the Capitol to support the legislation. Chris Hamilton, senior vice president of the West Virginia Coal Association, also spoke in favor of the bill.

U.S. Sen. Shelley Moore Capito, R-W.Va., introduced The Affordable Reliable Energy Now Act (ARENA) May 13.

Cole led the conference, stating his and other lawmakers’ support for Capito and Sen. Joe Manchin, D-W.Va., who also co-sponsored the bill.

“Nobody is against clean air, but the extent that President Obama and his EPA want to go will cause devastating harm to our coal industry and thousands of West Virginia families,” Cole said. “The proposed emissions reductions standards for power plants are unprecedented, complicated and expensive.

“Today we reaffirm our commitment to defend our coal industry and our state’s electricity consumers,” he added. “We stand ready to assist you both at the state level.”

ARENA seeks to roll back the U.S. Environmental Protection Agency’s proposed Clean Power Plan, which aims to reduce carbon dioxide emissions from existing coal-fired power plants. The Act would provide a way for a state’s governor to opt out of a state or federal plan that could negatively impact economic growth or electricity ratepayers, and supporters say it would prevent the EPA from withholding federal highway funds from states who do not comply with the Clean Power Plan.

In addition to speaking in support of the proposed legislation, Armstead also addressed the effect the declining coal industry has had on Appalachia.

“Sadly, it’s become almost a monthly occurrence the coal mines are shutting down in our state, we’re seeing WARN notices being issued to our employees and hardworking West Virginians in our coal industry are finding themselves unemployed,” he said.

“Rather than working with us to reverse this alarming, devastating trend in West Virginia, the Obama Administration is at it once again,” he added. “They’re imposing unreasonable and oppressive regulations that say to our hardworking West Virginians that the White House doesn’t care if it puts our West Virginians out of work, it doesn’t care if we become more reliant on foreign energy.

“In fact, this White House has said once again, loudly and clearly, that it doesn’t care about West Virginia.”

Similarly, Hamilton said the state has about 50 percent fewer mines now than it did 18 months ago.

“As we are asked to ratchet down our economy, as we are asked to ratchet down the number of operating mines and miners in this state, world growth of coal is on the rise,” Hamilton added.

Cole went on to prompt Gov. Earl Ray Tomblin and the state’s additional Congressional representatives to support the proposal.

“Promote this legislation and promote the most abundant, most inexpensive and most reliable source of energy our country has: coal,” Cole said. “Our economic future depends on coal and the freedom it brings.

“There’s absolutely no doubt that our state has been built on coal. There’s also no doubt that West Virginia’s coal built America,” he said. “Our coal miners are proud of their jobs, they’re proud of their heritages and they’re proud of their communities. We must help them find a brighter future.

“We have such a vibrant, strong history in our coal mining history; and I, for one, don’t believe the story is over,” he added. “West Virginia’s history and West Virginia’s fate should not be, and cannot be, decided by an executive order or by a group of non-elected bureaucrats in Washington, D.C.”

See the article here.

US Manufacturers’ Concerns About EPA Clean Power Plan

Via MetalMiner:

MetalMiner interviewed Ross Eisenberg, Vice President, Energy and Resources Policy atNational Association of Manufacturers (NAM); Brett Smith, Sr. Director, Government Relations at American Iron and Steel Institute (AISI); Jennifer Diggins, Director, Public Affairs, Nucor Corp.; and Mark Pruitt, Principal at Power Bureau on why US manufacturers are concerned about the Environmental Protection Agency (EPA)’s Clean Power Plan final rule going into effect mid-summer 2015. Also, learn how electricity costs and other compliance costs could go up for US manufacturers and steel producers, and why price volatility is such a big issue.

So What Does EPA’s Clean Power Plan Entail?

In a very general sense, what EPA has set is a carbon emissions goal for every state in the country, with the rule scheduled to be made final this summer. The goal – a 30% reduction in carbon emissions from existing stationary power plants – seeks to have full compliance at the state level by 2030, with compliance periods starting in 2020 based on approved statewide plans to be completed by June 2016.

What’s contained in the proposed rule is a recommendation from the EPA for states to generate plans that contemplate (but are not limited to) four building blocks.

The 4 Building Blocks: EPA Clean Power Plan

To save you the hassle of reading through the regulation-ese of Rule 111(d) – the subsection of the Clean Air Act which is essentially synonymous with the Clean Power Plan – here we distill for you the 4 building blocks proposed in the rule, and why it matters to utilities and downstream energy buyers of all types, including manufacturers:

  • Building Block 1: Improving thermal efficiency at existing power plants. The challenge posed by this building block: There’s no real way for a state to act to improve thermal efficiency of coal plants.
  • Building Block 2: Replacing use of coal power plants with natural gas combined-cycle dispatch. The challenge posed by this building block: Determining whether to increase natural gas operation is up to regional transmission organizations (RTOs), not the states.
  • Building Block 3: Expanding renewable energy generating capacity, e.g. wind and solar. The challenge posed by this building block: Structuring incentives for nuclear plants alongside renewables is a bit tricky.
  • Building Block 4: Increasing (overall) energy efficiency. The challenge posed by this building block: Certain states are determining their energy efficiency portfolio standards are not very cost-effective.

What Are Manufacturers’ Main Concerns?

If you want the nuances and details behind why US manufacturing organizations should be worried about the plan going into effect, please watch the video above. (Besides, it’s only 8 minutes long – less time than it takes you to eat your footlong Cold Cut Trio sub for lunch!) However, if you want the CliffsNotes version, here it is:

  • Increased compliance and energy costs (especially for large energy buyers/consumers such as those in the US steel industry). For example, for every ton of steel Nucor Corp. produces, roughly 20% relates to energy costs. Many estimates of the total costs in dollars are mind-boggling…more on that in the video.
  • Future lower energy demand scenarios may boost plant retirements and raise electricity prices. 
  • Compliance timeline as proposed by EPA will be practically impossible to achieve. Experts point to the monumental task of increasing natural gas transmission infrastructure, for example, to get even close to what EPA set out in its timeline up through 2030.
  • Loss of global cost-competitiveness for US manufacturers. This may be perhaps the biggest knock-on effect of this regulation – creating higher total cost of ownership for domestic manufacturers, while certain foreign manufacturers operate with not only with the luxury of heavily subsidized energy, but less stringent environmental compliance hurdles as well.

See the article here.

EPA’s Clean Power Act is all Pain, No Gain for Texas Economy, Energy Production


Texas’ balanced energy portfolio is what drives our state’s economic growth and provides job security to millions. Texas energy jobs aren’t just in oil fields, mines and power plants. The affordable electricity rates provided by our diverse energy supply ensure that other employers, such as those in our vast manufacturing and technology industries, maintain and grow their operations in Texas. Our diverse energy mix keeps residential electricity bills low, ensuring that more money stays in the pockets of hardworking Texans.

This growth and prosperity is being put at risk by the Environmental Protection Agency. Coal, which provides more than a third of the state’s electricity generation, faces the greatest risk. Its share is decreasing because of unwise environmental policies from Washington.

The EPA has taken direct aim at Texas, imposing burdens far greater than any other state. The Clean Power Plan (CPP), announced in June, would require a 38 percent reduction in Texas’ carbon dioxide emissions from power plants by 2030. Though Texas’ carbon dioxide emissions rate is lower than the national average, the EPA seeks to force Texas to shoulder a disproportionate share of the nation’s reductions, which will be greater than those of 27 other states combined.

The EPA has predicted over half of Texas’ coal-generation will have to be shut down under the CPP, with plant closures across the state. What does this mean for Texas? Lost jobs, higher electricity rates and greater chances of rolling blackouts.

A 2014 University of North Texas study found the Texas coal industry provides an economic benefit of more than $7 billion annually, supports more than 24,000 jobs that pay over $1.8 billion and contributes more than $690 million in state and local taxes. The biggest economic impact will come in the form of much higher energy bills.

By 2020, EPA rules are projected to increase annual power and gas prices in Texas by $42 billion and nationally by $284 billion. This will lead to a 54 percent increase in household electricity and gas bills, forcing the average Texas household to spend an additional $1,050 per year on electricity and gas. The impact to large consumers of electricity will be much more dramatic, especially in the manufacturing and petrochemical sectors of the Texas economy.

Ironically, the CPP will fail to provide any meaningful benefits to the U.S. or Texas. President Obama has pledged to reduce U.S. carbon dioxide emissions by 26 percent to 28 percent by 2025, which he claims prompted China’s pledge to peak skyrocketing carbon dioxide emissions by “around 2030.” While touted by the administration as a major step forward, China and the rest of the developing world will continue to increase carbon emissions so that reductions here will be dwarfed by increases abroad.

In fact, by 2030, all of the projected CPP emission reductions will be offset by Chinese emissions in 13½ days.

We do not want to return to rolling blackouts or large-scale outages, as we saw in Texas in February 2011 when a severe Arctic blast and a sharp rise in electrical demand forced ERCOT to initiate rolling blackouts temporarily. We cannot control the weather. We can control policy.

Affordable and reliable electricity is the backbone of Texas’ economy. Our economic prosperity is contingent upon the adoption of sensible policies that maximize the use of our state’s abundant, diverse and affordable energy portfolio, including oil, natural gas, coal and renewables. Letting Washington bureaucrats decide how Texas generates electricity will have catastrophic consequences. The Clean Power Plan is all pain, no gain.

Mike Nasi is general counsel for Balanced Energy Texas, a statewide coalition of energy consumers, producers and providers committed to supporting policies that preserve and promote our state’s leading role in energy and economic development.

See the article here.

Will the EPA’s Clean Power Plan Save You Money or Clean Your Clock?


By Rob Nikolewski │

The Obama administration and theEnvironmental Protection Agency is on the verge of instituting a Clean Power Plan that would mark the first federal measure to regulate carbon dioxide emissions from the nation’s existing power plants.

The EPA says the new rules will save money in the long run, but a recent study comes to a much different conclusion — estimating that 43 states will see their electricity prices increase by double-digits in the next decade, with 14 states having peak-year increases of more than 20 percent.

“You see no benefits from spending all this money and it’s driving up energy prices for families,” said Paul Bailey, senior vice president for federal affairs and policy at the American Coalition for Clean Coal Electricity, an industry group opposed to the proposed rules.

The group also questions whether the new rules will make any discernible difference in reducing the effects of climate change.

It’s another chapter in a long-running debate that has raged since the EPA announced the proposals last June, aimed at reducing CO2 emissions 30 percent by 2030.

EPA critics question whether the Clean Power Plan is the best way to balance economic realities with potential public health benefits while industry and political leaders in energy states such as coal-rich West Virginia accuse the EPA of overstepping its bounds by using the Clean Air Act to enforce the new rules on individual states.

The regulations would govern the estimated 2,417 fossil-fuel-fired power plants in the United States that account for 39 percent of the nation’s CO2 emissions — the largest single source.

NERA Economic Consulting, an economic research firm based in Boston, estimated it would cost between $366 billion and $479 billion over the next 15 years to fully comply with the new regulations, with many of those expenses passed on to energy consumers.

After crunching the numbers for all 50 states plus the District of Columbia, NERA estimated that ratepayers in every state will see electricity prices go up under the EPA regulations during 2020-2029 and that all but seven will see prices rise by 10 percent or more.

During peak years — when electricity usage is at its highest — the NERA study predicts that consumers in 14 states will see potential increases of more than 20 percent.

Utah and Wyoming are two of the hardest-hit states, with the study predicting that Utah ratepayers may see a 24 percent average increase in the next decade, with a potential 26 percent peak-year spike. Wyoming could see a 22 percent average increase, with as much as a 26 percent peak-year increase.

Here are the NERA estimates for all 50 states:

clean power plan analysis1

Chart from the American Coalition for Clean Coal Electricity

“This will really hit low-income people especially hard,” Bailey said, pointing to data showing that families with pretax earnings of less than $30,000 spend a disproportionate amount on energy expenses.

In a report released last month, the ACCE took the NERA data and broke them down to come up with estimates for the costs and impacts on families in each of the 50 states. 

EPA defends its plan.

The Clean Power Plan will maintain an affordable, reliable energy system, while cutting pollution and protecting our health and environment now and for future generations,” the agency says on its website, and emphasizes the Clean Power Planoffers states flexibility to devise “building blocks” to meet emissions reductions.

Critics of the NERA study point to the fact it was paid for by the American Coalition for Clean Coal Electricity and endorsed by other industry groups, including the American Fuel and Petrochemical Manufacturers and the National Mining Association.

“This information has been used in congressional hearings, it’s been used on the floor of the House and the Senate, it’s pretty solid information,” Bailey said.

Related: EPA carbon plan will kill 38,000 Virginia jobs, report says 

The EPA insists the Clean Power Plan will be a net plus for public health as well as the economy.

“Every dollar invested in the Clean Air Act returns $4 to $8 in economic/health benefits,” the agency said in an email to “Utilities are already investing in clean energy and EPA’s proposed rule propels that ongoing progress.”

The statement echoed remarks made by EPA Administrator Gina McCarthy when the plan was unveiled, saying the new rules will deliver up to $90 billion in climate and health benefits by 2030. When it comes to soot and smog reductions, “for every dollar we invest in the plan, families will see $7 dollars in health benefits,” McCarthy said.

“When states take advantage of energy efficiency — when the effects of our plan are in place in 2030, average electricity bills will be 8 percent cheaper,” the EPA statement went on to say.

Earlier this month, Nature Climate Change, a monthly peer-reviewed scientific journal that researches global warming, came out with its own study on the EPA power plant standards and touted the regulations’ benefits.

The Nature Climate Change study looked at three different scenarios and advocated adopting a “stringent but flexible policy” emphasizing demand-side energy efficiency — that is, instead of adding more generation to the system, getting utilities to pay energy users to reduce consumption.

But a spokeswoman for the the American Coalition for Clean Coal Electricity rapped the NCC study, saying its researchers ignored that coal makes up about 40 percent of the nation’s electric power.

“While these academics are hypothesizing about unproveable consequences, what’s known is that families are struggling to pay their monthly bills and companies are struggling to stay in business — and any increase in energy costs will burden them unnecessarily,” said Laura Sheehan, senior vice president for communications.

Opponents of the Clean Power Plan claim the expense from the EPA’s rules won’t make much difference in the climate, pointing to analysis from another EPA rulemaking that CO2 concentrations would be reduced by less than 0.5 percent, that global average temperature rise would be reduced by less than two-one hundredths of a degree and sea level rise would be reduced by 0.3 of a millimeter — the thickness of three sheets of paper.

“These numbers are sort of like kryptonite for the EPA,” Bailey said in a telephone interview. “They do not like to admit that the Clean Power Plan will have no effect on global climate change.”

“We know that acting on climate isn’t just a moral responsibility we must accept — it’s an economic opportunity we can seize, to sharpen our competitive edge, create jobs, strengthen international ties, and catalyze global action,” the EPA statement to said.

The Clean Power Plan looks to push power plants to transition from coal to cleaner sources of energy and the NERA study predicts it will lead to coal generation dropping by 29 to 71 percent.

Two coal companies and 14 states are challenging the EPA in court, saying the agency lacks the authority to issue the regulation and is overstepping its bounds by treading on ground previously reserved for the Federal Energy Regulatory Commission and individual states.

But public utility commissioners, environmental and energy agency leaders in 14 other states have come out in support of the EPA.

The final regulation for existing power plants is before the EPA while the final rule for new plants is currently before the Office of Management and Budget. The EPA is expected to sign off on the ruling for existing and new power plants this summer.

(Clarification: An earlier version of this story incorrectly described the status of final rules for existing and new power plants. It has since been corrected.)

See the article here.

Senators Capito, Manchin Introduce Legislation to Roll Back EPA’s Clean Power Plan


WASHINGTON, D.C. – U.S. Senator Shelley Moore Capito (R-W.Va.), Chairman of the Senate Environment and Public Works Committee’s Clean Air and Nuclear Safety Subcommittee, today introduced a bill that will be the principal legislative vehicle in the Senate to rollback President Obama’s “Clean Power Plan.”

A bipartisan group of six Senators joined Senator Capito at a press conference this afternoon to unveil The Affordable Reliable Energy Now Act (ARENA), which will ensure reliable and affordable energy, put jobs and our economy first, and curb federal overreach.

“President Obama’s misguided ‘Clean Power Plan’ threatens to drastically reduce coal-related jobs, increase energy prices and reduce reliability. After carefully considering the economic and legal implications of this unprecedented proposal, the need for action is clear,” said Senator Capito. “The Affordable Reliable Energy Now Act enables us to fight back against the assault on coal, and the broader threat to affordable, reliable energy nationwide. I am proud to lead the charge against the ‘Clean Power Plan’s’ sweeping regulations and look forward to working with my Senate colleagues to move this very important legislation forward.”

Key provisions of the bill include:

· Prevents mandates for unproven technology: Before EPA can set a technology-based standard for new power plants, the standard must first be achieved for at least one year at several separate power facilities throughout the country. The bill also prevents the EPA from using any demonstration projects –projects that are reliant on federal support – from being used to set the standard.

· Extends compliance dates: The bill would extend the rule’s compliance dates pending final judicial review, including the dates for submission of state plans.

· Holds EPA accountable: This bill would require EPA to issue state-specific model plans demonstrating how each state could meet the required GHG emissions reductions under the rule.

· Enables states to protect ratepayers: The bill would provide that no state shall be required to implement a state or federal plan that the state’s governor determines would negatively impact economic growth, negatively impact the reliability of the electricity system or negatively impact electricity ratepayers.

· Protects highway fund dollars: The bill would prevent the EPA from withholding highway funds from any states for noncompliance with the “Clean Power Plan.”

The ARENA Act, which takes into account EPA’s proposed regulations for both new and existing power plants, also requires EPA to submit to Congress a report describing the quantity of greenhouse gas emissions the “Clean Power Plan” is expected to reduce, and to conduct modeling to show the impacts of the rule on the climate indicators used to develop the rule.

The bill is co-sponsored by Senate Majority Leader Mitch McConnell (R-Ky.), Senate Republican Whip John Cornyn (R-Texas), Senate Republican Conference Chairman John Thune (R-S.D.), Senate Environment and Public Works Committee Chairman Jim Inhofe (R-Okla.), and Senators Joe Manchin (D-W.Va.), John Barrasso (R-Wyo.), Roy Blunt (R-Mo.), Roger Wicker (R-Miss), Lamar Alexander (R-Tenn.), Pat Roberts (R-Kan.), Rand Paul (R-Ky.), John Hoeven (R-N.D.), Johnny Isakson (R-Ga.), Dan Coats (R-Ind.), Mike Crapo (R-Idaho), Mike Enzi (R-Wyo.), Jim Risch (R-Idaho), Deb Fischer (R-Neb.), Ted Cruz (R-Texas), John Boozman (R-Ark.), David Perdue (R-Ga.), Steve Daines (R-Mont.), Tom Cotton (R-Ark.), Tom Tillis (R-N.C.), Mike Rounds (R-S.D.) and Bill Cassidy (R-La.).

“I applaud Sen. Capito for introducing legislation that would allow states to better protect middle class families from the ramifications of the Obama Administration’s regressive, and likely illegal, energy regulations,” said Majority Leader McConnell.

“Sen. Capito’s measure, which I proudly co-sponsored, demonstrates what I presented during the Budget Resolution, that the Administration cannot withhold highway funds from states that do not comply with its regressive energy regulations that would hit middle and working-class families especially hard. This bill, which further highlights a ‘way out’ for states from these massive new regulations that seem more motivated by ideology than science — regulations that could negatively impact their economy and hurt both the cost and reliability of energy for their citizens —effectively reiterates the message I relayed in a letter to our nation’s governors in March,” McConnell added.

“The president’s backdoor energy tax will threaten grid reliability and stick ratepayers with the bill,” said Senator Thune. “We need affordable and reliable energy to power American industries to build a stronger economy and create jobs, not federal overreach. The ARENA Act takes an important step in holding the Obama EPA’s aggressive agenda in check and will protect states from this onerous regulation.”

“I applaud Sen. Shelley Moore Capito for introducing the ARENA Act to protect states and ratepayers from the Obama administration’s economically disastrous climate agenda that threatens the affordability and reliability of our nation’s electricity grid. This bill will prevent an agency of unelected bureaucrats from dictating what type and how much energy Americans can use to power their homes and their businesses. The president’s Clean Power Plan alone will cost $479 billion dollars over 15 years and result in double digit electricity price increases in 43 states, including my home state of Oklahoma. We simply cannot afford these regulations. I look forward to working with Sen. Capito, and my colleagues in the Senate, to help this bill become law,” said Senator Inhofe.

“Middle and low-income households are disproportionately hurt by bad energy policies resulting in high utility bills, because these are the consumers who already spend a greater share of their paychecks on energy,” said Senator Blunt. “President Obama previously admitted that costs would ‘necessarily skyrocket’ under his energy policies, and unfortunately, the EPA’s Clean Power Plan would hit the poorest and most vulnerable Missourians the hardest. I’m pleased to join my colleagues on this important bill to allow Missouri and other states to protect workers and families from the Obama Administration’s burdensome energy regulations, and I’ll keep fighting to support Missouri’s economic competitiveness.”

“The EPA’s carbon emissions rule jeopardizes the reliability and affordability of the electricity that millions of Americans use to power their lives every day,” said Senator Manchin. “The agency’s regulations will threaten the stability of our electric grid, low electricity prices, countless jobs in the energy, production and manufacturing sectors, and the American economy. That is simply unacceptable. The EPA cannot place unreasonable regulations and unobtainable standards that will undoubtedly strangle energy production. This legislation will ensure that the EPA’s regulations are based on demonstrated technology that is commercially available across the United States, which strikes the proper balance between our environment and our economy.”

“Electric utilities and virtually everyone working in North Dakota’s energy industry is concerned about the EPA’s impending regulation of greenhouse gas emissions and the effect it will have on jobs and their local economies,” said Senator Hoeven. “Our bill would address that concern for North Dakota and states across the nation by preventing a federal action that is freezing investment in the industry, hindering domestic energy production and impeding the creation of good jobs for Americans.”

“The Obama climate plan is all pain and no gain. It raises costs and destroys jobs, but it doesn’t truly impact the global climate. That’s according to the EPA’s own estimates. This bipartisan bill will protect families from higher energy bills, prevent electricity blackouts and ensure that possible EPA mandates are based on a realistic review of the available technology. It will also protect states that exercise their ability under the law to say “no” when the EPA pressures them to impose state-level mandates. I urge support for these commonsense reforms,” said Senator Boozman.

“Nearly every American household depends on electricity, and yet the Obama Administration is attempting to go around Congress to limit this critical resource,” saidSenator Cruz. “The Affordable Reliable Energy Now Act is an important step to reining in the President’s executive actions and restoring state control over the energy supply.”

“The EPA’s proposed greenhouse gas rules would have a direct and devastating impact in Arkansas and across the country. This bill pushes back against these new standards and it provides states with the flexibility to opt out of these standards if their rates are projected to increase under them. It also rightly requires the EPA to recognize the important differences between our many energy sources, ensuring Arkansas’s lignite coal and our coal-fired power plants aren’t unfairly penalized. I will continue to work with my colleagues to fight back against President Obama’s EPA and to ensure Arkansans continue to have access to affordable, low-cost energy sources,” said Senator Cotton.

“As proposed, EPA’s Clean Power Plan would result in higher electricity rates, fewer jobs and uncertainty surrounding the reliability of the electric grid – with little environmental benefit. It threatens the livelihood of South Dakota’s only coal-fired plant at Big Stone, which is already in the middle of a $400 million compliance upgrade. Our legislation would give states much-needed flexibility and additional time to comply with this proposal and protect taxpayers from paying the burden through higher electric bills,” said Senator Rounds.

“The Obama administration’s war on American energy is a war on American families and a war on American jobs. This commonsense, bipartisan legislation will protect good-paying union jobs, our tribes’ ability to develop their energy resources and Montana families’ access to affordable and reliable energy from the EPA’s misguided, one-size-fits-none regulations,” said Senator Daines.

“The EPA’s coal killing regulations will take more money out of every family’s pocketbook in the form of higher energy prices and cost many Americans their job,” said Senator Enzi. “We should be working with our energy producers to create more abundant and affordable energy, not trying to put them out of business. This legislation will put the American people first by taking the teeth out of the president’s plan to destroy the country’s most reliable energy source.”

“As a 100 percent public power state, Nebraska will be disproportionately impacted by President Obama’s overregulation of our electricity system. Families and businesses will be forced to pay for costly plant upgrades, higher electricity bills, and more expensive goods and services. That is why I am proud to cosponsor this legislation to protect Nebraska families from the EPA’s proposed takeover of our electric grid. This overreach is unnecessary and with this bill, we can empower states across the country to protect their citizens without harming our economy,” said Senator Fischer.

“Georgia’s families and businesses depend upon affordable, reliable electricity,” saidSenator Isakson. “They want to know that the lights will turn on when they hit the switch. The EPA’s proposal will limit Americans’ energy choices and create unfavorable economic conditions for stakeholders without producing any tangible environmental benefits.”

“President Obama’s executive overreach has created a Constitutional crisis in this country, and his latest power grab through the EPA will hurt American families and businesses,” said Senator Perdue. “Georgians and all Americans deserve a government that takes steps to grow the economy rather than put in place more burdensome energy regulations. I will continue to fight for a smarter energy policy and prevent President Obama’s EPA from this audacious overreach,” said Senator Purdue.

See the article here.

Major Kentucky Candidates for Governor Will Refuse EPA Plan

Via The Washington Times:

Kentuckians won’t know who their next governor is until after the November election, but they do know he won’t comply with the EPA’s coal regulations.

The Environmental Protection Agency has told states to submit a plan on how they will cut carbon emissions 30 percent by 2030. The Kentucky Coal Association says all five major candidates for governor have pledged they will not submit a plan.

It is likely a wise political strategy. While Kentucky’s coal industry is in steep decline, it still holds a powerful cultural and political influence in the state.

Jack Conway is the likely Democratic nominee for governor. Matt Bevin, James Comer, Hal Heiner and Will T. Scott are all vying for the Republican nomination on May 19.

See the article here.

EPA’s Dangerous Desire To Become America’s Energy Regulator

Via Forbes:

Imagine that a federal agency seeks to fundamentally change the way electricity is provided to every household, school and factory in the United States. In fact, the agency’s proposal is so sweeping and dramatic that across the nation independent experts have raised concerns about it. According to the Nation’s reliability expert, the North American Electric Reliability Corporation, the agency’s proposal “may represent a significant reliability challenge” to the electric grid. The independent entity that runs New York’s power grid—the NYISO—similarly warned that the proposal “presents potentially serious reliability implications for New York.” And a Commissioner at the federal agency actually charged with regulating our nation’s power grid testified to Congress that the proposal “has the potential to completely undermine the market principles that underpin dispatch” of our Nation’s power systems, and that it may have “profound reliability implications.” All that might get your attention, right?

Now imagine that when the exact same federal agency that seeks to forever alter the Nation’s electric power system proposed this rule, it made several statements that revealed a fundamental lack of understanding about how the country’s electrical systems actually work. For instance, the agency stated unequivocally that electric generators “using diverse fuels and generating technologies . . . produce fungible electricity services,” and that “generation at one [electric generator] can be substituted for generation at another” regardless of the generating unit’s operating characteristics, its geographic location, grid design or any of a host of other factors. Got your attention yet?

Every first year electrical engineering student learns within the first few days of classes that electric generation at one location is simply not fungible with generation from another location. That same student quickly learns that a wind farm does not provide the same type or consistency of electricity as the electricity generated from a coal-fired power plant and that electricity generated from a plant located in Southern California cannot always be substituted for electricity generated in Northern California. These students also come to learn that there are circumstances throughout the country where electric generation units located just a few hundred yards apart provide very different electrical services to the electric grid depending on a variety of factors, such as the type of generation units, how and where they are connected to the grid, and the electric service they provide. As a Commissioner at the federal agency actually tasked with regulating our energy systems testified to Congress, “[i]t would be a sweeping, and incorrect, assumption to simply say that all megawatts are equal when it comes to reliability within or across regions. . . .” Do we finally have your attention now?!

EPA’s proposed Clean Power Plan would dramatically change all this and in doing so would arrogate upon EPA control over how every American gets and uses electricity service—whether that customer is a homeowner in De Moines, a factory in Ohio, or someone running their air conditioner in California. Simply put, the EPA’s proposal reaches into every aspect of the generation and use of electricity in the United States through its so-called “plant to plug” approach to CO2 emissions.

The EPA’s sweeping new plant to plug approach is radically different from any other regulation the EPA has previously imposed on electricity generators. Instead of merely saying to an existing power plant “thou shalt not emit more than X” from your smokestack, the Clean Power Plan would insinuate the EPA into every aspect of the Nation’s energy grid. For instance, the EPA proposes to reduce the use (demand in industry terms) of electricity by requiring States to impose energy efficiency standards that meet the EPA’s approval. This is a laudable goal to be sure, but the demand reductions the EPA proposes cannot possible be implemented as quickly as they want (if ever), and if they could, they would change consumer and industrial consumption patterns forever. At the same time, the EPA is requiring States to massively shift generation away from fossil fuel-fired power plants to renewable sources of electricity such as wind and solar. But as any first year electrical engineering student knows, you can’t simply substitute wind or solar power for coal power on a megawatt-for-megawatt basis if you want to keep the lights on when the wind isn’t blowing or the sun isn’t shining. The electric grid simply does not work that way.

Whether the EPA even has the legal authority to promulgate the Clean Power Plan will eventually be decided by the Courts. But, putting the EPA’s lack of legal authority aside, the key question every American should be asking is whether EPA has thesubstantive and technical expertise to be the Nation’s energy regulator. With the greatest respect, an agency that views all electricity as “fungible” lacks the substantive expertise to adequately consider the impact its proposed rule might have on the reliability of the electric grid and the long-term effect on costs to the American electricity consumer. That expertise has always rested with FERC and the States.

There has been a great deal written about how the Clean Power Plan was developed and proposed without much of a role for FERC. One FERC Commissioner even testified to Congress that in a meeting with the EPA’s Joe Goffman and Janet McCabe, the EPA refused “to allow FERC” to look at documents relating to the Clean Power Plan.

And, when FERC did have some initial views, the EPA appears to have simply ignored FERC’s advice. The Director of FERC’s Office of Reliability memorialized in a memo that in one private meeting, FERC advised the EPA that it “had doubts” about the EPA’s proposal to vastly increase the use of natural gas-fired generation in lieu of coal-fired generation. FERC also advised that there were “unresolved questions” about the proposed increased reliance on renewables, and that the EPA’s aggressive timeline for relying on renewables would be “difficult” to accomplish. In essence, FERC—the federal experts on questions of electric reliability—advised the EPA that its Clean Power Plan may have serious reliability implications for the Nation’s electric grid, but the EPA refused to listen.

More recently, the EPA has publically stated that it wants to work more closely with the States and FERC on reliability issues. This has led many to propose, in various forms, a so-called “reliability safety valve” that would be included in the final Clean Power Plan. That a general consensus has emerged that a safety value is needed all but concedes that the EPA’s proposal will cause reliability problems. But, almost all of the current safety net proposals appear to leave the ultimate decision making concerning electric reliability in the EPA’s hands, rather than in FERC’s and the States’, despite the reality that FERC and the States have the statutory mandate and the necessary technical experience to ensure the reliability of the electric power grid. Having the EPA administer an after-the-fact reliability safety value is no different than acknowledging that there is going to be a major car wreck but saying that as long as there is a good auto-body shop down the road, all will be fine. The “Better get to Macco” approach may work for cars, but it isn’t the way to protect the integrity of the Nation’s power grid.

The short answer is that the EPA does not have the expertise to be our Nation’s energy regulator. Congress has left that job to FERC and the States. But the EPA is now aggressively expanding its regulatory chokehold over the United States energy industry in a blatant attempt to seize control from FERC and the individual States on questions of how all electricity will be generated and consumed in the U.S. There has to be a better way of getting both a cleaner environment and keeping the lights on.

William S. Scherman is a partner at Gibson, Dunn & Crutcher LLP and is chair of the firm’s Energy, Regulation and Litigation practice group. Mr. Scherman previously served as General Counsel and Chief of Staff of the FERC. Charles H. Haake is of counsel at Gibson Dunn and is a member of the firm’s Environmental and Mass Torts practice group. Jason J. Fleischer is a senior associate at Gibson Dunn and is a member of the firm’s Energy, Regulation and Litigation practice group. 

See the article here.

State Rep. Andy Holt: State Should Opt Out of Clean Power Plan

Via The Knoxville News Sentinel: 

The U.S. Environmental Protection Agency is at it again. Its new Clean Power Plan isn’t just an unprecedented attempt by a federal agency to tell states how to generate electricity, it’s also an outrageous overreach. What the EPA is attempting is far beyond its legal authority. Worse, it’s trying to make the states party to this unconstitutional effort, requiring each to draft its own State Implementation Plan.

The Clean Power Plan is an effort by the EPA to dictate how to keep the lights on, and it favors more expensive, less reliable sources of power like wind and solar over cheaper, traditional sources such as coal, in the name of reducing carbon emissions.

Unfortunately, any environmental benefits from this rule will be so small as to be effectively meaningless, while consumers and businesses will be confronted with significantly higher electric bills. Here in Tennessee, for example, where we get roughly 40 percent of our electricity from coal and the EPA is demanding a 39 percent reduction in carbon emissions, one study found the average family can look forward to paying as much $116 more per year to keep the lights on.

EPA officials understand how radical and unpopular this will be, which is why they’re doing their best to make states complicit through the state implementation plans. But why should any state spend taxpayer resources and state employees’ time drafting a plan to comply with something that is going to face strenuous legal challenges and will likely be rejected by the courts? After all, this is the proposal that Harvard law professor Laurence Tribe — President Barack Obama’s own professor of constitutional law — described as “burning the Constitution.” And if a state refuses to file an implementation plan, the worst that the EPA can do is force a “model plan,” which many have argued will be less economically damaging than states trying to meet their own individual targets.

A little-known tool called the anti-commandeering doctrine has been upheld by the U.S. Supreme Court for more than 180 years. It allows states to opt out of enforcement of any and all federal laws and regulations, regardless of constitutionality. Tennesseans cannot afford this, and our taxpayers shouldn’t be forced to have their own tax dollars working against them to increase their monthly expenses. We can opt out, and we should.

That’s why U.S. Senate Majority Leader Mitch McConnell suggested earlier this month that states’ wisest course of action may be to do exactly that: nothing. Indeed, some states have indicated that they will refuse to go along with the Clean Power Plan and will refuse to file an implementation plan, but until now Tennessee has not been among them. I hope that will change.

Recently 19 of my fellow legislators and I sent a letter urging Gov. Bill Haslam not to develop or file a state implementation plan. We believe this is the best option for our state. Not only will it prevent the use of taxpayer resources for something that will, with any luck, never actually be called for, but also because we believe that the alternative — a federal “model plan” — would be less economically harmful to Tennessee.

If Tennessee complies with the diktats of the Clean Power Plan, it won’t be just the consumers paying more. Also at risk will be the 8,000 Tennesseans holding jobs in industries that will be directly affected, as well as any industrial worker, as their employers will be confronted by electricity bills costing them $116,000 more per year to stay in operation.

Common sense, and Tennessee’s jobs and economic health, agree: Haslam should inform the EPA that he will not be fi ling a state implementation plan. We encourage him to do so, and we’ll be the first to applaud when he does.

Andy Holt is a Republican representing Dresden in the Tennessee General Assembly.

See the full article here. [subscription required]

New Coal Regulations Could Cost Southern Illinois Jobs, Critics Say


If passed, new proposed EPA restrictions could cripple mining in Southern Illinois, critics allege. Each May, the Old King Coal festival takes over the town of West Frankfort.

The city used to be a boom town filled with coal mines and a population nearing 20,000. “Now there are no coal mines in West Frankfort. There is one coal mine in Franklin County and the population is just a little over 8,000.” said Old King Coal Advertising Director Marcia Raubach.

The goal of the Old King Coal festival is to make sure people know just how important coal mining is here in Southern Illinois.
“40 percent of the energy in the state of Illinois comes from coal burn. What happens if we lose that? Electricity rates go up, rolling brownouts and blackouts.” commented Bost. New proposed EPA regulations are threatening the industry that many Southern Illinoisans rely so heavily on. Something Congressman Mike Bost is trying to stop.

If passed the restrictions would result in an increased use of other recourses like Natural Gas. Bost says he is hopeful for the future of coal in Southern Illinois.

“It does look bright as long as we keep the federal EPA back which we are doing and trying to keep them at bay.” added Bost.
The new regulations would require more restrictions on emissions. Scientists say they would save thousands of lives by cleaning-up the air in major cities.

“If they were implemented it would devastate the coal industry.” said Bost.

The festival wraps up Sunday, next year will mark the event’s 75th anniversary.

See the article here.



States Aim to Pre-emptively Block Power Plant Regulations

Via Roll Call: 

Nonetheless, Senate Majority LeaderMitch McConnell, R-Ky., has proven adept at reinserting Congress in the debate. In March, the coal-state senator publicly urged states to defy the EPA by refusing to submit plans for complying with the rule for existing plants, which he argued will eventually be thrown out by a court.

It’s a risky proposition for the states, which face the prospect of the EPA stepping in and mandating its own compliance plan in their borders. Oklahoma Attorney General E. Scott Pruitt last week likened the threat of an EPA backup plan to “the proverbial gun to the head” in an appearance before Inhofe’s committee.

However, Oklahoma Republican Gov. Mary Fallin last month became the first governor to take McConnell’s advice, issuing an executive order prohibiting the state from submitting a compliance plan to the EPA.

McConnell also surprised climate advocates by publicly warning foreign nations against negotiating with the Obama administration on an international climate agreement that is supposed to be completed in Paris later this year.

When EPA Administrator Gina McCarthy showed up at the Senate Appropriations Committee earlier this month to defend the agency’s fiscal 2016 budget request, McConnell reminded her Congress couldn’t pass a cap-and-trade climate bill even when Democrats controlled both chambers.

“The failure of Congress to sign off should signal to other countries that they should proceed with caution in the December climate talks in Paris,” he said.

During the hearing, McConnell also suggested a new avenue for critics when he read aloud from an obscure section of the Clean Air Act he said would require states to gain congressional approval to form regional compacts for complying with the rule for existing plants.

David Doniger, a longtime attorney with the Natural Resources Defense Council who helped develop the group’s suggestions for how the EPA could regulate greenhouse gases from power plants, later dismissed McConnell’s reasoning as a non-issue. Still, the majority leader’s point highlights that the EPA critics will leave no stone unturned in their quest to void the regulations.

Responding to McConnell, McCarthy reiterated the EPA is acting under the authority provided by Congress, and predicted the rule will “withstand the test of time in the courts.”

“Yeah, that’s going to be the test,” McConnell responded. “You’re going to have to prove it in court.”

See the article here.

Federal Rules Hike Utility Costs at a Time When E. Ky. is Suffering


Eastern Kentucky’s persistent struggles to achieve sustained economic prosperity are well documented. It is tempting to conclude current difficulties are simply another cycle in that history. But that is not quite the case.

While most of the U.S. and Kentucky are finally showing recovery from the Great Recession, there is no recovery in Eastern Kentucky. The region has not only wrestled with the recession, but has been devastated by the decline of its coal industry.

More than half of the region’s coal-mining jobs — 8,500 of the best-paying jobs to be found — have disappeared since 2009.

The decline of Eastern Kentucky’s low-sulfur coal industry has several drivers. New natural gas recovery methods have made that fuel more cost-competitive. The cost of production has risen as easy-to-reach seams are mined out. Utilities have shifted their purchases to cheaper, high-sulphur coals in response to Environmental Protection Agency rules that forced them to add scrubbers to power plants. And additional federal regulations have steadily driven up the cost of mining and burning coal.

The federal regulations targeting coal deserve attention. They have impacted both coal mining and electric utilities. And, in turn, it has impacted people, especially coal miners and electric rate-payers.

As federal regulations continue to pile on, the most severe impact will continue to be on the people who pay the monthly electric bills, especially those on low and fixed incomes. Member-owned, not-for-profit electric cooperatives are deeply concerned about the impact on our members, who ultimately pay these bills.

Recently, East Kentucky Power Cooperative released the second of two films documenting the struggles of people in communities devastated by the coal industry’s decline. We believe it is important to make their voices heard, especially by federal policy-makers and regulators. (View the film at

For decades, federal and state policies have guided our cooperatives to invest in the most affordable, most reliable means of generating electricity. In this region of the country, that has meant coal.

Most of the electricity we generate is fueled by coal. As a result, Kentucky historically has had some of the lowest electric rates in the nation, along with a dynamic manufacturing economy that depends on low energy costs.

We have continued to make prudent investments in our coal fleet. In the past decade, EKPC has added two of the cleanest coal generators in the nation, and we have retrofitted older generators with equipment to slash emissions. This represents investments of nearly $1.7 billion to remain in compliance with federal air regulations while meeting our members’ needs. It will take many years to pay for those projects.

Now, our cooperatives face proposed regulations, including the Obama administration’s Clean Power Plan, that threaten our ability to operate those plants at maximum efficiency, effectively stranding hundreds of millions of invested dollars. (Keep in mind that government policies led to those investments.)

So, in Eastern Kentucky, which has fueled much of America’s economy for generations, out-of-work coal miners and struggling families face the cruel prospect of rising electric rates at the same time government policies force utilities away from coal.

This isn’t fair. Our members deserve the assurance that their investments will not be wasted by misguided government policies.

Meanwhile, EKPC and our owner-member co-ops are proud to work alongside Gov. Steve Beshear and Congressman Hal Rogers to ensure Eastern Kentucky has a bright, stable future.

We are part of their SOAR initiative. This unique collaboration shows the greatest promise in recent generations to create sustained prosperity. But until those plans bear fruit, we hope federal policymakers come to a better understanding that their choices are creating more despair in Eastern Kentucky.

Anthony “Tony” Campbell is president and CEO of East Kentucky Power Cooperative.

Read more here.


Courts Must Step in and Stop EPA’s Brazen Overreach


It’s been said that ‘timing is everything’ and time is just one of the issues at stake in the legal proceedings surrounding the Environmental Protection Agency’s proposed Clean Power Plan, which would regulate carbon emissions from existing power plants. Specifically, the Court must decide if a proposed federal regulation, like the CPP, can be struck down before it is finalized.

In this case, that would be the right decision.

Last month, attorneys on behalf of Murray Energy Corporation and a bipartisan coalition of 15 states argued before the U.S. Court of Appeals District of Columbia Circuit seeking to have the Court dismiss EPA’s plan. One of the arguments made by EPA is that the Court must not dismiss the rule because it is still tentative, could change, and the EPA could still “even withdraw the proposed rule”.

When it comes to the Clean Power Plan, however, the EPA is clearly talking out of both sides of its mouth. As EPA attorneys seek to convince the courts the proposed rule could be influenced or even withdrawn based on the feedback received in the public comment period, EPA officials are blatantly singing another tune.

Just one week prior to the oral arguments before the Court of Appeals, EPA Administrator Gina McCarthy told an energy symposium, “[The Clean Power Plan] is going to happen. We have the legal – not just right and authority but responsibility – to do it.”

In March, McCarthy said, “EPA is going to regulate… If folks are thinking any of these pieces aren’t going to happen – and (the Clean Power Plan) isn’t going to be implemented, I think they need to look at the history of the Clean Air Act more carefully.”

These are hardly the words of an agency that is still making up its mind.

Fortunately, Judge Thomas Griffith seemed to pick up on this during oral arguments, asking the EPA if McCarthy’s remarks suggest that the agency’s comment period is a “sham.” While the EPA argued it wasn’t, the evidence certainly suggests otherwise.

When the EPA held field hearings on the rule, they neglected to hold them in coal-rich areas that would be among those most hurt by its plan. EPA’s air quality chief Janet McCabe told Congress the agency held hearings in “locations where people were comfortable coming.”

A sincere comment period should not be about comfort. It should be about hearing the impacts – both good and bad – of a proposed rule. Unfortunately, the EPA seems uninterested in doing the right thing.

It is essential the courts act now to stop EPA’s Clean Power Plan because the impacts on states are already being felt. EPA’s proposal requires each state to submit a specific plan that will lead to a nationwide cut in carbon dioxide emissions by an average of 30 percent by 2030. These plans are to be submitted to EPA by June 2016.

These plans represent an extraordinarily complex undertaking. States will need to study their electricity infrastructure, change their policies and laws, adjust their regulatory structures, all while ensuring electric reliability isn’t put at risk. Many states suggest the development of such a plan will require three years or more, yet EPA is giving them just one. Adding insult to injury, all of this work must be done irrespective of legal challenges that will likely overturn the rule.

To accommodate this accelerated schedule, states already are dedicating taxpayer dollars to prepare for the rule. Alabama, Indiana, Kansas, Kentucky and South Dakota are just some of the states that report using significant amounts of staff time studying the proposed rule and the substantial changes they would need to make to implement it.

Whether the EPA has deemed it final or not, the Court has the right and the ability to stop this “sham” process in its tracks, and they should do so.

Mike Duncan is the head of the American Coalition for Clean Coal Electricity and former head of the Republican National Committee.

See the article here.

EPA Plan For ‘Clean Power’ Could Jeopardize Safety Of U.S. Electrical Grid


As President Obama looks to implement strict rules on carbon emissions, coal-powered electrical generation is on the chopping block.  For those worried about “climate change,” coal is a convenient target. Unfortunately, a plan by the Environmental Protection Agency (EPA) to shutter hundreds of domestic, coal-fired power plants has been hastily thrown together, with no confirmed alternatives for steady, reliable power generation.

What’s at stake is “grid reliability,” whether supply exists to meet the current, massive U.S. demand for electricity. For much of the country, the EPA’s mandate is troubling because, right now, roughly 40 percent of electricity in the United States comes from coal-fired generation.

Under new EPA regulations, many of these plants would be effectively forced out of operation. And to date, no one is saying how that power will be otherwise produced. Wind, solar, and natural gas have all been suggested, but none is capable of providing reliable and affordable electricity as coal can. While some states are able to rely on alternative sources, including wind and hydropower, that simply isn’t an option for much of the country.

The importance of coal in generating electricity was demonstrated very clearly last winter, when coal-fired plants worked overtime to heat homes and businesses during a deep freeze. In fact, American Electric Power, a major utility company, reported that 90 percent of its coal plants slated for retirement under pending EPA rules were running at full speed just to meet peak demand.

Despite record-setting production in the Marcellus Shale and elsewhere, natural gas simply can’t compensate for a shortage of coal plants. This is due in part to a lack of infrastructure to deliver gas where it’s needed. But more importantly, natural gas has already been prioritized for home use, not power generation.

A recent report from PJM Interconnection, the regional power transmission group for 13 states, including the District of Columbia, concluded that without coal plants there could be insufficient electricity to meet peak winter demand.

Under the EPA’s “Clean Power Plan,” consumers will undoubtedly pay higher electricity bills. But the more tragic problem is the possibility of widespread power outages during the coldest parts of winter.

These worrisome scenarios have so far been swept aside by the federal government. The shift away from coal is moving ahead with no regard for the consequences. And so, in light of the recent PJM report, the EPA’s regulatory plan amounts to very reckless toying with the nation’s power grid.

The truth is that there’s simply no way around the use of coal to help ensure affordable and reliable power in the current market. That’s why state utility commissions and regulators from 22 states have sent formal comments to the EPA expressing concerns that the Clean Power Plan will jeopardize reliable and affordable electricity. That’s why the U.S. needs a diversified power portfolio, including coal, in order to meet the nation’s electricity needs.

Those seeking to eliminate coal under the guise of improving the environment need to adopt a realistic plan. 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. Any move away from coal that can add sufficient alternative sources of power generation will require many years to implement. Thus, it makes no sense for the EPA to rush ahead with a foolhardy plan that will effectively undermine the ability to generate reliable and affordable electricity in America.

See the article here.

Blacks, Hispanics Reject Obama Climate Change Agenda Over Concerns About Poor

Via The Washington Times:

The very same voters who helped put Barack Obama in the White House increasingly are turning against the president’s climate change agenda, with influential black and Hispanic leaders warning that stiff regulations to limit carbon emissions will have a devastating effect on the poor and will further stifle economic opportunity for minorities.

Some of Mr. Obama’s most ardent supporters say they simply cannot go along with the administration’s increasingly ambitious program to combat global warming. They argue that, contrary to the Environmental Protection Agency’s claims, the carbon regulations will drive up utility bills for poor households and will stunt economic growth in low-income areas.

The mounting wave of criticism shows that for many minority leaders who backed the president’s election bids and support him on a host of other issues, Mr. Obama’s environmental agenda runs counter to their chief concern: protecting the poor and ensuring that they can afford to keep their lights on.

“Cosmetically, it sounds good to say, ‘We want to clean up the environment.’ That’s fine. But you’re talking about eliminating one problem and creating another. We’re talking about astronomical increases in utility bills. You’ve got people now who need to make a decision: Do I put gas in my car? Go to church? Buy my medicine?” said Charles Steele Jr., president of the Southern Christian Leadership Conference and a self-described Obama supporter.

“I think he’s an outstanding individual, but the EPA is wrong on this issue. I want to be on the right side,” he said. “I have to stand for what is right for poor people. Poor people don’t have lobbies. That’s what people need to understand.”

Mr. Obama aims to lead the world to a historic climate change agreement this year as the EPA finalizes its Clean Power Plan, an unprecedented set of regulations intended to greatly reduce emissions from power plants.

The final proposal, scheduled to be released this summer, is expected to call for a 30 percent cut in carbon emissions by 2030. The bulk of that reduction would come from coal-fired power plants.

Administration officials and environmental supporters argue that the power plant move — in conjunction with other steps such as increasing auto fuel efficiency — will decrease emissions, improve public health and spur economic growth through innovation and will drive investment into burgeoning industries such as the wind and solar power sectors.

Critics say the EPA plan will lead to job losses, higher electric bills, the closure of coal plants and an economic ripple effect that may hit minority communities hardest of all.

In addition to Mr. Steele, other powerful black and Hispanic leaders are pressing the EPA to change course.

“It is critical that the regulations coming out of Washington protect small business owners, in all communities, from increased electricity costs. If monthly energy bills get too high, business owners are forced to trim their spending in other areas, which too often includes payroll,” the U.S. Hispanic Chamber of Commerce said in public comments submitted to the EPA. “We urge EPA to re-examine the impacts and implementation of its Clean Power Plan proposal, which we believe is currently too inflexible, costly and contains many unknown impacts.”

The National Black Chamber of Commerce expressed similar concerns, telling the EPA in a written statement that the carbon rules will “ultimately force African-American business owners to eliminate good-paying jobs and become more financially unstable as energy costs rise.”

The EPA also is contending with fierce accusations of misconduct and incompetence. Lawmakers say the agency has turned a blind eye to sexual harassment and other misdeeds.

The House Oversight and Government Reform Committee grilled administration officials Thursday for apparently promoting Peter Jutro to lead the EPA’s office of homeland security despite numerous accusations of sexual harassment. An EPA inspector general’s report also found that agency employees were kept on the payroll after they were caught watching pornography at work.

“We’ve seen numerous examples of fraud, unprofessional behavior, cronyism and outright theft at the EPA,” said Rep. Jason Chaffetz, Utah Republican and committee chairman. “It is well past time for someone to be held accountable for these management failings.”

An EPA representative shot back against charges that sexual harassment was ignored, saying the agency “does not tolerate harassment in the workplace and finds such conduct completely unacceptable.”

The EPA also dismisses concerns that its Clean Power Plan will harm minority communities. The agency insists the carbon regulations will benefit low-income areas specifically.

“There is strong scientific evidence that minority and low-income communities are especially vulnerable to the impacts of climate change and can be disproportionately harmed by pollution from industry and transportation. Reducing carbon and other air pollution nationally will have important benefits to these vulnerable groups and communities,” the agency said in a statement.

The public health and climate benefits of the plan could total as much as $93 billion per year by 2030, the statement added.

Other data paint a much different picture.

A report from the center-right American Action Forum says the EPA plan could cause more than 90 coal-fired power plants to shut down.

The fallout from those closures could eliminate as many as 296,000 jobs, the survey says.

Other data show that blacks and Hispanics are much more concerned about the economic consequences of the president’s policies than they are about climate change itself.

More than 75 percent of black and Hispanic voters say they worry about rising energy costs, according to a poll released in October by the American Coalition for Clean Coal Electricity, a leading critic of Mr. Obama’s climate agenda.

The survey also said that just 3 percent of black voters and 7 percent of Hispanic voters think climate change is the issue that impacts their communities most.

About 60 percent of black and Hispanic voters say the administration should focus on keeping energy prices low rather than pursuing climate regulations, according to the poll.

See the article here.


Energy-producing States Blast Obama Clean Power Plan

Via The Los Angeles Daily News:

WASHINGTON >> The Obama administration’s far-reaching plan to address climate change would cause job losses and lead to higher electricity prices and even power outages, attorneys general from two energy-producing states said Tuesday.

West Virginia Attorney General Patrick Morrisey and Oklahoma Attorney General Scott Pruitt told a Senate panel that the administration’s plan to cut heat-trapping pollutants from coal-fired power plants would cause existing plants to retire early and prevent new ones from being completed.

“Make no mistake about it: finalizing this proposal would have a devastating impact on my state, other coal-producing states and citizens from across the country who will feel the impact of high electricity prices and reduced reliability of the power grid,” Morrisey told a clean air subcommittee of the Senate Environment Committee.

Pruitt called the plan an attempt by President Barack Obama and the Environmental Protection Agency to “expand federal bureaucrats’ authority” over the way states produce energy. EPA is attempting to “force states into shuttering coal-fired power plants” in an effort to drive the nation away from fossil fuels and other traditional sources of energy, Pruitt said.

Oklahoma and West Virginia are among 15 coal-reliant states that are suing the EPA to block the so-called “Clean Power Plan,” which would require states to cut carbon dioxide emissions by 30 percent by 2030.

The EPA rule is a centerpiece of Obama’s efforts to reduce the pollution linked to global warming. Power plants are the largest source of greenhouse gases in the U.S., accounting for about a third of the annual emissions that make the U.S. the second-largest contributor to global warming on the planet.

EPA Administrator Gina McCarthy and other administration officials say the plan gives states flexibility to meet broad goals set by the government. “Each state is different, so each goal and each path can be different,” McCarthy said when the plan was proposed last year.

But Sen. Shelley Moore Capito, R-W.Va., said EPA is “dictating to states” and “micromanaging” their energy-policy decisions. “At risk is the ability that states have always had to make decisions about their electricity generation,” she said.

Capito, who chaired Tuesday’s subcommittee meeting, said West Virginia has “chosen to rely on coal to provide affordable and reliable electricity” and has one of the lowest electricity rates in the nation.

“Other states make different choices that best serve their citizens. But under the Clean Power Plan, each state’s electricity plan would have to meet EPA’s criteria for reducing carbon dioxide emissions and be approved by EPA,” she said.

With the economy still in recovery, “the last thing job creators need is another expensive regulation likely to drive up energy prices,” Capito said. “And the last thing our families and senior citizens need is to see their electric bills continue to go up.”

Capito said she will introduce a bill next week to block the EPA plan, one of several proposals in Congress to delay or defeat the plan.

See the article here.


WV Attorney General Fights Clean Power Plan Legality in US Senate Hearing

Via The State Journal:

West Virginia Attorney General Patrick Morrisey took another stand against the U.S. Environmental Protection Agency’s Clean Power Plan on May 5, testifying before a U.S. Senate Environment and Public Works subcommittee hearing in Washington, D.C.

Morrisey, who has taken repeated actions to fight against the legality of the proposed Clean Power Plan, presented his testimony in the Clean Air and Nuclear Safety Subcommittee on the “Legal Implications of the Clean Power Plan.”

The Clean Power Plan, proposed in June 2014, aims to reduce carbon dioxide emissions from coal-fired power plants. The rule is expected to be finalized by mid-summer.

The testimony comes shortly after Morrisey, among others, presented oral arguments for two lawsuits filed against the proposed rule to a three-member panel of the U.S. Court of Appeals for the District of Columbia Circuit on April 16.

The state’s lawsuit claims the proposed regulations are illegal because they seek to require states to regulate coal-fired power plants under section 111(d) of the Clean Air Act, even though the EPA already regulates those same plants under the hazardous air pollutant program under CAA section 112. According to Morrisey, 1990 amendments to the Clean Air Act expressly prohibited such double regulation.

“An agency should not be permitted to threaten to impose a rule that it knows will never survive judicial review, in order to scare utilities, power plants, and coal mines into closing their doors in anticipation of the rule being finalized,” Morrisey said in a news release. “It is an abuse of power that directly harms West Virginia and other coal-producing and coal-burning states.”

Sen. Tom Carper, D-Del., however, said the legal arguments are unfounded, as the Supreme Court has previously ruled that EPA does have such authority under the Clean Air Act.

Carper went on to say the country needs to address climate change now to minimize damage from rising sea levels.

“I want to make sure we treat West Virginia fairly. I (also) want to make sure we treat Delaware fairly,” he said, addressing the potential impact rising sea levels could have on Delaware, which has a mean elevation of 60 feet above sea level. “The highest point in Delaware is a bridge, it’s not a mountain.”

But Morrisey told May 5 hearing attendees that impacts from the proposal, including high electricity prices, lost jobs, and potential grid reliability problems, would cause “greater economic dislocation” in the already-impoverished State of West Virginia.

“Finalizing this proposal would have a devastating impact on my state and other coal states,” Morrisey said.

Morrisey also said the State of West Virginia intends to challenge the rule in court if it is finalized by the administration.

“With the economy still far from recovered … the last thing our citizens need is to see their rates go up,” said Sen. Shelley Moore Capito, R-W.Va., who serves as chairwoman of the subcommittee.

Some West Virginia residents and lawmakers, she added, have been disappointed by a perceived lack of interest from the EPA.

“We don’t feel the calculation of the economic impact in our communities has been fully explored or even taken into consideration,” Capito said.

Other hearing witnesses included Oklahoma Attorney General Scott Pruitt; Roger Martella, a partner at Sidley Austin LLP; Kelly Speakes-Backman, the commissioner of the Maryland Public Service Commission and chairwoman of the board of directors for Regional Greenhouse Gas Initiative Inc., and Lisa Heinzerling, the Justice William J. Brennan Jr. Professor of Law at Georgetown University Law Center.

Read the article here.

Okla. Governor Vetoes Bill Aimed at EPA Carbon Plan After Signing Executive Order

Via E&E Publishing:

Edward Klump, E&E reporter

Published: Monday, May 4, 2015

Oklahoma Gov. Mary Fallin (R) vetoed a bill Friday that envisioned a review by the state’s attorney general of any state implementation response to U.S. EPA’s plan to regulate carbon dioxide emissions from existing power plants.

Fallin issued the veto the same week she signed an executive order that seeks to prevent Oklahoma from submitting an implementation plan related to a final EPA carbon rule (EnergyWire, April 30).

In a news release, the governor said the vetoed legislation — S.B. 676 — had been described as an attempt to fight EPA. In fact, Fallin said, it inadvertently had the opposite effect by requiring that Oklahoma develop a state plan. The attorney general could have rejected the plan after reviewing its legality.

Fallin said her executive order was the “clearest path” to fighting EPA carbon mandates, saying the legislative approach backed by some others in state government could come with great expense for the state.

“I stand with our Legislature and our attorney general in opposing the EPA’s unconstitutional and ill-conceived power-grab,” Fallin said in a news release. “However, we do not need to spend a lot of time and money to develop a plan that we have no intention of implementing and every intention of rejecting, which is what this bill requires.”

In a veto message, Fallin said developing a state plan would involve “dozens of state and private entities and thousands of hours of study and negotiations. It is a massive undertaking and requires the commitment of untold amounts of financial and time resources.” She called it unnecessary because she, the Legislature and the attorney general agree that Oklahoma shouldn’t implement a state plan.

EPA has said it’s preparing to deliver a final version of its proposed Clean Power Plan this summer. The plan seeks to cut carbon emissions from power plants 30 percent by 2030 compared with 2005 levels. Targets vary by state, and some interim goals could start in 2020.

Attorney General Scott Pruitt, a Republican, had applauded the Senate last week for passing S.B. 676 as a way to help fight EPA. In an emailed statement, his office had indicated the bill would bolster the more temporary nature of an executive order.

The Oklahoman newspaper reported that Pruitt, in a statement, expressed disappointment with the veto and said the bill wouldn’t have created a large expense for the state but would have made sure Oklahoma didn’t have to turn in a plan that conflicted with state or federal laws.

State Sen. Greg Treat, the Republican author of the bill, described the executive order as cover for a veto and was considering Friday afternoon whether to seek an override, The Oklahoman reported.

Fallin said in a news release last week that her executive order was intended to show that “Oklahoma has no intention of implementing new regulations that run directly contrary to the interests of our citizens and our state.”

Her order said developing a plan could happen only if it’s found to be necessary by the state’s attorney general or a “court of competent jurisdiction.” Fallin said there would need to be written authority of the governor.

If EPA’s plan is finalized, Fallin said, the attorney general is to review it and publish a white paper on the legal efficacy of the regulation. She also requested the attorney general take necessary action in enforcing the rights of Oklahoma in relation to federal action that may affect the “freedoms of its people.”

See the article here.

Carbon Taxes In Revenue Fantasyland

Via The Wall Street Journal:

The words “carbon tax” are appearing ever more frequently on the lips of economists and policy makers. Earlier this month, former Rep. Bob Inglis (R., S.C.) received the John F. Kennedy Profile in Courage Award for advocating it. Last Wednesday Rep. John Delaney(D., Md.) announced at a Washington, D.C., symposium on the issue that he is drafting a bill. Also last week, unconstrained by a legislative process, Yale University imposed a carbon tax on itself. More on that later.

In each case, it is presented as an article of faith that such a tax shall be “revenue neutral,” meaning that every dollar raised will be offset by a rebate or a tax cut. This is a convenient and misleading fiction. It might work on the first day, when the tax goes into effect and people pay a tax on their carbon emissions while paying commensurately lower other taxes. But what happens when people respond to the tax by reducing their carbon emissions? What happens in year 10, when people have responded to the tax by shifting toward expensive alternatives to carbon-intensive energy production?

Two problems emerge. First, the tax base will have shifted onto something that we are trying to reduce. As carbon emissions decline, so too will tax revenues. This dynamic might seem appealing as a way to “starve the beast” and force cuts in government spending, but more likely it will trigger irresistible pressure for tax increases. It is a policy mistake to leave the government reliant on a diminishing-by-design tax base for its funding and political folly to program a strong demand for increased revenue into the tax code.

Moreover, a carbon tax may be revenue-neutral on the way up but it is not on the way back down. As taxable, carbon-intensive energy sources are replaced by higher-cost/lower-emissions alternatives—arguably the whole point of the policy—Americans will continue to pay a price implicitly inflated by the tax even though their government no longer receives the revenue from it. As substitute taxes come back online to make up the difference, even if that substitute is simply an ever-increasing rate on the remaining carbon emissions, the economy is left to pay for both the higher-cost energy and the full tax burden it already supports today.

The performance-art exhibit that is Yale University’s “revenue neutral” plan provides a helpful if abstract illustration. The university will charge the budgets of departments that use relatively more carbon while crediting the budgets that use relatively less. Each department therefore has an incentive to reduce its emissions and there is no net effect on the overall university budget. So far so good.

But what happens when the university’s departments respond to these incentives by adding real cost to their operations? Suppose a dormitory reduces its “tax” burden by $100,000 by adding solar panels at an amortized annual net cost of $50,000. The university takes in $100,000 less of tax “revenue” and will subsequently rebate $100,000 less elsewhere, so the “neutrality” is preserved. But it just spent $50,000 very real dollars.

Those dollars will ultimately have to come from budget cuts or tuition increases. The more strongly the tax affects behavior, the more damage it will do to the university’s finances despite remaining “neutral” every step of the way.

A comparable effect plays out through an economy-wide carbon tax. As soon as customers and businesses move to avoid the tax by paying for higher-cost renewable energy or hybrid cars, they will find their taxes as high as ever (assuming a fixed size of government) and their energy more expensive too.

One may defend such burdens on environmental grounds, but one cannot ignore the economic drag. Repealing other carbon-related regulations would help to reduce the drag, but those regulations are criticized today for their relative weakness and ineffectiveness. A key selling point of the tax is typically the expectation that its impact will be significantly stronger than that of current regulations.

Claims of “revenue neutrality” make a carbon tax sound like a free lunch, even though it imposes costs on the economy very similar to those that accompany cap-and-trade plans or command-and-control regulation. The Yale example is especially transparent: The university does not tax its departments to fund its operations today, and it will not in the future. Even if it did, it would obviously recycle those funds back into its budget anyway. So what could calling its new accounting program “revenue neutral” even mean, except to imply “costless” when it is anything but?

If one wants to reduce carbon emissions one might argue for a carbon tax as the best or most economically efficient approach. But adding the descriptor “revenue neutral” does not reduce the cost.

Mr. Cass is a senior fellow at the Manhattan Institute.

See the article here.