When the Environmental Protection Agency issued its Clean Power Plan earlier this month, Minnkota Power Cooperative and North Dakota’s elected leaders were understandably stunned by the final product. That is because the rule looked nothing like what had been proposed a year earlier. It was much worse for North Dakota utilities and electric consumers.
The outrage has been bipartisan, with Sen. John Hoeven, R-N.D., stating that the rule “is the wrong way to go” and Sen. Heidi Heitkamp, D-N.D., referring to it as “dangerous.”
A recent Forum editorial characterized this response as “excessive” and “over the top.” However, in light of significant cost increases electric consumers will likely bear under this plan, and the serious questions surrounding grid reliability, the reaction is anything but excessive.
Part of the outcry from public officials and utilities is based on the way the plan was developed. In 2014, the EPA told North Dakota that it would require an 11 percent cut in carbon dioxide emissions by 2030 to meet the overall national goal. The federal agency went to great lengths to explain how it studied each state’s unique circumstances and resources. Only a year later, the EPA issued a final rule that requires a 45 percent reduction – more than quadrupling the original proposal. No notice. No discussion. No logical explanation.
State officials in North Dakota are in the unenviable position of developing a plan to meet the second-most stringent carbon standard in the nation. They don’t have long to determine the best path forward. The initial state plan needs to be submitted to the EPA by September 2016 and base-level compliance begins in 2022.
So there is one year to determine how to radically reshape North Dakota’s energy industry and then five years to have it partially implemented. Tough, irrevocable and expensive decisions will need to be made to comply.
Backbone of grid
An initial analysis of the 1,560-page rule indicates that there is no way North Dakota can get to 45 percent without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.
That’s a big problem.
Power plants fueled by lignite coal are the backbone of the region’s electric grid. They run reliably around the clock. And they do so cost-effectively. North Dakota’s utilities have a proven record of developing and implementing technologies that significantly reduce emissions. More than $2 billion in state-of-the-art technology has been installed in recent years to keep our air clean. The result has made North Dakota one of only seven states to meet all of the EPA’s strict federal ambient air quality standards.
Prematurely shutting down plants would strand these substantial investments, meaning consumers will have to pay for the expenses associated with that plant, while paying the additional costs for new power plant assets.
As an industry, we can find new, innovative technology to make strides toward reducing carbon emissions. It just takes time. Unfortunately, the EPA’s plan gives us no time and ties up all investment dollars in building new power plants fueled by a different source. That’s a shame because North Dakota still has 800 years of recoverable coal reserves available.
Wind doesn’t count
Our concern with the rule doesn’t stop at coal. Minnkota’s current investment in wind energy in North Dakota does not count toward the EPA’s standard simply because it was installed before 2012. Nearly 30 percent of our electric generation capacity comes from wind – one of the top percentages among electric cooperatives in the nation. Another 10 percent comes from emissions-free hydropower. No credit is given by the EPA for the prudent, yet significant, investments in these resources.
What does this mean for electric rates in the region? Costs will likely go up significantly for homes, schools, businesses and farms. Just how much remains to be seen. If North Dakota’s economy is to continue thriving as it has in recent years, it will need reliable, low-cost electricity. The Clean Power Plan, as it stands today, puts that in jeopardy.
The Forum editorial suggests that this position qualifies as nothing more than “Chicken Little rhetoric.” The Clean Power Plan is much more than an acorn hitting us on the head. To use the words of Sen. Heitkamp, it’s “a slap in the face” to North Dakota.
McLennan is president and CEO, Minnkota Power Cooperative.
See the article here.
- On August 22, 2015