Gathered under the gold dome of the Capitol Monday, state and energy leaders denounced the U.S. Environmental Protect Agency’s Clean Power Act, saying it would have a negative impact on the state’s leading industry.
Gov. Earl Ray Tomblin, Appalachian Power President Charles Patton and West Virginia Coal Association President Bill Raney said 60 pages of comments were submitted to the EPA before the Dec. 1 public comment deadline on the proposal, which would tighten coal emission standards.
State and industry leaders express concerns on myriad subjects, from the proposal’s impact on energy cost increases to power grid reliability. They also questioned the legality of the proposed rules.
“This proposal rule would have a devastating impact on the economy of the state and nation,” Gov. Tomblin said in prepared remarks. “Across West Virginia, we are already seeing real impacts of the current regulatory environment in which industry must operate and we remain concerned that this irresponsible mandate will cause significant negative effects for West Virginians and the nation’s power grid.”
Both Tomblin and APCO’s Patton said the EPA’s proposed “Build Blocks” to assist states in complying with the new rules are unattainable.
During the half hour press conference, leaders continuously spoke of the nation’s power grid and how the proposed EPA rules to reduce greenhouse gas emissions from power plants may threaten reliable electricity delivery.
Last month, the North American Electric Reliability Corp., the federally designated grid reliability overseer, issued a warning that it “cannot conclude whether the [EPA] targets are achievable or not in all regions and states” without having an adverse effect on the grid.
The NERC report called for a detailed analysis by power companies and regulators to determine what effects the unprecedented switch from coal-fired plants to natural gas would have on the nation’s electric grid.
The term grid is a misnomer. Instead of a grid, the network closely resembles a patchwork quilt stitched together to cover the nation. The aging grid is stretched to capacity and the switch from coal to natural gas would only add to the stress on the network, experts said.
“The power grid is now already at the limit with so many retirements of coal-based load power plants as a result of EPA rules,” Federal Energy Regulatory Commission Chairperson Cheryl LaFleur testified before Congress earlier this summer.
She continued the electricity grid was “close to the edge” of breaking.
The commission said switching the grid from coal-fired to natural gas will be precarious and expensive.
In West Virginia, coal-fired plants represented more than 95 percent of the state’s power generation in 2013, according to the West Virginia University’s Bureau of Business and Economic Research’s Economic Outlook. Nationwide, over the last several years, natural gas has made significant market share gains, rising from 13 percent in 2001 to a high of 33 percent of the total U.S. power generated in 2012. In the same time period, coal’s share of U.S. power generation fell from 53 percent in 2001 to as low as 32 percent in 2012.
However, coal has regained its lead in power generation, with its share raising to as much as 44 percent in the early part of 2014. Meanwhile, natural gas has fallen about 25 percent during the same period.
“Despite these short-term gains, the prospect of coal-fired generation in the long-term remains unfavorable,” the Outlook reads. “Capital costs for new coal-fired plants remain high in comparison to natural gas combined cycle plants..
The U.S. Energy Information Administration issued a report recently predicted that for power plants entering service in 2019, the cost for natural gas will be almost one-third lower than for coal on a per megawatt hour basis.
That has some power company officials expressing fear of being able to keep the electric flowing. Some are worried the EPA’s proposed changes and short timeline for compliance will have a potential impact on power grid reliability.
Mark McCullough, AEP’s executive vice president of generation, said during the 10th annual Energy and Natural Resources Symposium that the proposal ‘really creates a huge impact to our ability — and every utility’s ability — to provide affordable, reliable and environmentally responsible electricity …”
Christine Risch, director of Resource and Energy Economics at Marshall University’s Center for Business and Economic Research, said West Virginia’s grids are old, but are not any worse than other states’ since the patchwork quilt of lines are all linked together along the Eastern Seaboard. Many of the state’s power plants are four or more decades old, she said.
West Virginia power plants will remain coal burning for another generation. “This area is not switching to natural gas in the next 20 years,” Risch said.
However, other parts of West Virginia are going forward with plans to build natural gas powered and hydroelectric plants. In Marshall County, in the northern part of the state where oil and natural gas are abundant, construction will start soon an a power plant fueled by natural gas. The plant, called Moundsville Power LLC, recently received a permit to build a 549 megawatt natural gas combined cycle plant, which is expected to employ more than 400 people. This plant would increase the state’s natural gas capacity by 50 percent, county and state officials said.
A hydroelectric plant in Pleasants County is currently under construction, which would add 44 milliwatts of renewable energy.
AEP has said it plans to decommission three coal-fired plants in the northern part of West Virginia over the next several years.
Surrounding states are also decommissioning old coal-fired plant and building non-coal-fired facilities. Ohio, Pennsylvania, Virginia and New Jersey are either in the process of building plants or ready to begin construction of natural gas power plants shortly, said Risch.
In an indication of how the power grid would change due to less coal-fired generation, FirstEnergy, the parent company of 10 power providers, submitted paperwork in Virginia and Pennsylvania Tuesday to upgrade transmission lines and substations to accommodate the retirement of coal-fired power plants.
FirstEnergy said in a press release the $8.3 million project is needed to maintain the reliability of the utility’s system once it retires three coal-fired units by the end of this month.
The Economic Outlook predicts between 2012 and 2015 West Virginia will retire about 1,700 milliwatts, amounting to about 10 percent of the total capacity of the state.
“These job losses could be offset somewhat if [the state] begins to see new natural gas generation being built” in West Virginia, the Economic Outlook reads. “However, it’s likely that the new carbon rules could induce additional coal-fire plants closures during the next five years …”
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- On December 11, 2014