Coal, Combined Cycle, Emissions, Gas, New Projects, New Projects, Policy & Regulations, Renewables

Clean Power Plan Official as States Prepare to Fight Rule

It’s official: The U.S. Environmental Protection Agency’s Clean Power Plan (CPP) was filed Friday with the Federal Register, marking the first time in history U.S. power plants are legally required to limit greenhouse gas emissions.

The final rule is effective Dec. 22, 2015 – 60 days after publication – at which time the CPP becomes the law of the land.

Unveiled in August, the final version of the CPP requires a 32-percent reduction of carbon dioxide (CO2) emissions from 2005 levels by 2030.  States have different reduction targets based on their energy mixes.

States must submit compliance plans by 2018, while the compliance deadline is 2022.

The EPA said it received more than 4 million public comments regarding the CPP after the first version was made public in June 2014.

Compliance entails replacing fossil fuel-fired power with renewable power, displacing coal by dispatching more combined-cycle gas power and/or improving a plant’s heat rate to a certain standard.

For power plant managers and operators, the rule will change the way they maintain and operate power plants.

Under the final rule, the EPA lowered its assumption for necessary improvements in heat rate efficiency for coal-fired plants from 6 percent nationally to between 2.1 percent and 4.3 percent regionally.  Also, the EPA revised emission limits to reflect 75 percent of a unit’s “net summer capacity” instead of 70 percent of “nameplate capacity.”  Critics argued this measure better reflects the real operating conditions of a power plant, and the EPA agreed.

The CPP is expected to benefit the natural gas and renewable sectors as they offer a means for power generation while producing little to no emissions.

“There is no reference (in the final CPP) to natural gas as a preferred means of compliance,” said Patrick MacElroy, director of media relations for Black & Veatch.  “But the reality is that in order to hit these targets and maintain a grid, there is going to be a significant addition of natural gas generation capacity in the U.S.”

Rhone Resch, president and chief executive officer of the Solar Industries Association (SEIA), issued the following statement upon the CPP’s publication with the Federal Register:

“As a nation, it is time to replace our aging, dirty energy infrastructure with clean, reliable, affordable 21st century energy technologies.  Solar Energy is the most sensible compliance option for stations under the Clean Power Plan.  Solar works in all 50 states, has zero carbon emissions, creates more jobs per MW than any other technology and can be deployed cost-effectively and quickly – all while improving grid reliability.  The solar industry is looking forward to helping states achieve an optimal long-term strategy for both their economies and environment.”

The CPP will require the investment of billions of dollars in new gas pipelines to feed the new plants that will be required to maintain a grid and cut emissions, and billions more will be needed for new transmission to support the addition of increasing renewable capacity.

The coal sector will suffer the biggest hit with the CPP as an estimated 35 percent of the nation’s 300 GW of coal capacity are expected to be retired through 2040, though many of those plants are expected to be phased out by 2020.

About two dozen states have already announced plans to sue over the rule, claiming the EPA is overreaching and doesn’t have the authority to regulate emissions.

The Texas Attorney General Office on Friday called the CPP “an unlawful plan to radically restructure the way electricity is produced and consumed throughout the country.”

“Once again, President Obama and his EPA have overstepped their legal authority and enacted a regulation that will dramatically raise Texans’ electric bills and threaten the reliability of the electric grid,” Attorney General Ken Paxton said in an online statement.  “The Texas Attorney General’s Office is leading a nationwide coalition, along with West Virginia, to prevent massive increases in electric bills that would hurt hard-working families, the elderly and the poor.”

West Virginia Attorney General Patrick Morrisey called the EPA’s rule “one of the most far-reaching energy regulations in this nation’s history.

“West Virginia is proud to be leading the charge against this Administration’s blatant and unprecedented attack on coal,” said Morrisey.  “EPA claims to have sweeping power to enact such regulations based on a rarely-used provision of hte Clean Air Act but such legal authority simply does not exist.”

Colorado Attorney General Cynthia Coffman, who announced plans in August to fight the CPP, told The Denver Post Friday, “It would be remiss if I, as attorney general, looked the other way and said, ‘Because Colorado is likely to meet this carbon dioxide cap, we shouldn’t challenge the federal government.'”

North Dakota Attorney General Wayne Stenehjem said earlier this month his state’s lawsuit would come as soon as the new rule was published in the Federal Register.

“It does not make sense for North Dakota to sit back and decide we’re not going to do anything,” Stenehjem told The Bismark Tribune, adding that the state would try to comply as best it can while pursuing litigation.

North Dakota and Oklahoma are planning independent lawsuits.