COLUMBUS, Ohio — Ohio will fight the Obama administration’s plan to dramatically reduce the amount of carbon dioxide the state’s utilities are pumping into the atmosphere.
State regulators on Monday challenged the feasibility and legality of the U.S. Environmental Protection Agency’s proposed “Clean Power Plan” that would cut power plant CO2 emissions by 30 percent during the next 15 years, starting in 2020.
The Public Utilities Commission of Ohio filed a 67-page analysis with the U.S. EPA arguing the federal proposal would spike power prices, hurt industry and destabilize the regional high-voltage grid.
The Ohio EPA filed a parallel analysis with the federal agency questioning the engineering and regulatory assumptions underlying the feasibility of the CO2 reductions, as well as the legality of what the federal authorities are trying to do.
The U.S. EPA last summer proposed specific CO2 reduction targets from old, coal and oil-fired power plants for each state, but said it would allow the states to figure out how to reach the targets.
States that refused, or just could not reach a consensus, would face a federal plan of action.
Closing old coal and oil plants, or increasing their efficiency, or switching to natural gas were suggested options to reduce CO2 emissions.
Requiring utilities to add renewable energy — such as wind farms and solar arrays, or increasing energy efficiency mandates to cut demand were also suggested as other methods to comply.
The U.S. EPA also offered to look more favorably on regional carbon dioxide reduction plans developed by two or more states.
The PUCO analysis did not include a full-blown multi-state approach.
Ohio regulators are not enthused about any of it of what the U.S. EPA is proposing.
Their bottom line: It’s too expensive, violates federal law and ignores the fact that the state’s electric utilities have already cut emissions by more than 20 percent compared to 2005 levels.
The PUCO’s analysis argued that if Ohio utilities were to rely more on their gas-fired power plants, many of which are just combustion turbines, the price of wholesale power in Ohio could increase by 39 percent over the next decade. That would add $2.5 billion to electric bills in 2025 alone, the agency argued.
“The PUCO … has serious concerns about [the proposal’s] impact on the delivery of reliable and affordable power to Ohioans,” spokesman Matt Schilling wrote in a note releasing the agency’s response. “Our comments to the U.S. EPA highlight numerous concerns, including billions of dollars of added costs to Ohio’s utility ratepayers.”
In a letter to U.S. EPA Administrator Gina McCarthy included with the Ohio EPA’s comments, Director Craig Butler pointed out that Ohio’s utilities cut CO2 from 138 million tons in 2005 to 107 million tons in 2013.
Planned shutdowns of additional Ohio power plants that do not meet new mercury emission rules will cut CO2 emissions nearly another 34 million tons over the next two years, Butler wrote.
“Even after this dramatic reduction, U.S. EPA demands additional reductions that will unnecessarily threaten electric reliability, reduce manufacturing and coal mining employment and increase electric rates,” he complained.
The state EPA’s analysis also argues that the way in which the federal EPA is attempting to regulate the CO2 emissions — by bullying the states — is not legal. That dovetails with Ohio’s already under way legal challenge to the rules.
The Ohio Attorney General’s office is one of 18 attorneys general questioning the U.S. EPA’s authority to set CO2 emission limits on existing coal-fired power plants. They argue that federal law gives regulatory authority over power plants to the states.
Similarly, the PUCO’s response dismissed the engineering studies the EPA used to argue that the efficiency of old coal-fired power plants, known as “heat rate” in the industry, could be increased by 6 percent.
The PUCO further argued that its predicted 39 percent increase in power prices would not be the only impact on customer wallets. Consumers probably would see heating costs rise as well, the agency suggested.
In the PUCO’s view, a massive switch to gas-fired power plants also would require the construction of new pipelines to deliver gas to power plants — costs that would also filter down to ratepayers.
The PUCO’s destabilization conclusion appears to be based largely on a report released earlier this fall by the North American Electric Reliability Corporation.
NERC, an industry group charged with maintaining reliability suggested a massive switch from coal to gas should be carried out over decades rather than a few years in order to minimize the impact on the grid.
The PUCO’s technical analysis spends little time analyzing the federal argument that states ought to beef up their mandates requiring utilities to help customers adopt, buy and install energy efficient lighting and other technologies, projects which would reduce demand for electricity.
That’s a strategy that Ohio Republican lawmakers in May knocked out for at least two years with the passage of a bill freezing the state’s annually increasing efficiency and renewable benchmarks through 2016.
Environmental groups, led by the Natural Resources Defense Council, have been arguing since June that those standards — along with renewable energy from solar and wind projects — alone would enable Ohio to meet the federal CO2 reductions without all the switching to natural gas.
“Ohio’s agencies are largely focused on perceived cost impacts of the Clean Power Plan,” wrote NRDC attorney Samantha Williams in an email response.
“But these are unlikely to materialize unless the state gets serious about reinstating its clean energy standards. Energy efficiency and renewables have proven eminently successful at jump-starting Ohio’s economy and reducing consumer energy bills – not to mention cutting carbon from the power fleet. The state should be looking more to these tools that are already at its disposal.”
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- On December 3, 2014