The Environmental Protection Agency has miscalculated the cost of its Clean Power Plan by ignoring its effect on electric cooperatives that own a minority share of power plants, among other mistakes, an NRECA analysis says.
NRECA says EPA’s Clean Power Plan contains oversights that will cost co-ops millions of dollars more in compliance. (Photo By: Getty Images/iStockphoto)
As a result, NRECA said the plan will cost co-ops up to 33 times more than EPA estimates—an additional $2.5 billion to $3.6 billion in 2030—depending on the approach taken to meet the regulations.
Overall compliance costs for co-ops from 2022 to 2030 will range from $11.7 billion to $20.3 billion, the association said.
“EPA has underestimated the Clean Power Plan’s costs to small entity electric cooperatives by a drastic amount,” said NRECA interim CEO Jeffrey Connor.
“This translates into huge price increases for co-ops and challenges their ability to provide safe, affordable and reliable electricity to their member owners,” he said.
NRECA critiqued the numbers in a Jan. 21 filing with EPA on the controversial plan, which seeks to cut power sector carbon dioxide emissions by 32 percent by 2030.
According to NRECA, EPA limited its review to small business entities like co-ops that are majority owners of coal and natural gas combined-cycle unit plants still in operation in 2030.
That means the agency didn’t factor compliance costs for co-ops that own partial, non-majority shares of affected plants, NRECA said.
“EPA substantially underestimates the number of electric cooperatives injured by the proposed rule,” the association said in comments filed by NRECA Environmental Counsel Rae Cronmiller.
NRECA said EPA should have counted 31 co-ops as small business entities when it evaluated the scope of the regulations. Instead, the agency identified only 17 co-ops.
For example, it excluded Tampa, Fla.-based Seminole Electric Cooperative, whose principal generating facility is twin 650-MW coal plant in Putnam County. Seminole officials say the rule could force the plant to close prematurely.
The EPA analysis accounts for about only one-quarter of small entity electric cooperatives’ ownership shares in more than 20,000 megawatts of coal-fired capacity, NRECA said.
NRECA added that EPA also missed the mark by anticipating co-ops will retire about 3,000 megawatts of coal generation in the normal course of business, without the Clean Power Plan. The agency assumes there will be no compliance costs associated with those units.
However, NRECA said the reality is different. In the absence of the Clean Power Plan, co-ops intend to keep the vast majority of the capacity online.
“Thus, EPA substantially understates the cost associated with complying with the [rule],” NRECA said.
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- On February 8, 2016