Comment period closes for EPA’s Clean Power Plan, industry groups have their say

December 1 brought the deadline for the comment period on the U.S. Environmental Protection Agency’s proposed Clean Power Plan, and industry groups, regulatory bodies and power utilities are releasing their final comments both to the EPA and to the public.

A common theme in industry group sentiment is that EPA’s proposed timeline does not allow adequate time for the needed reliability assessments and system changes to be done by 2020, by which time many states would need to have accomplished significant emission reductions.

Groups such as the Electric Reliability Council of Texas (ERCOT) and Midcontinent ISO (MISO) have already filed either comments or public assessments on the EPA policy to have states cut carbon dioxide emissions from the power sector 30 percent by 2030.

Some groups including the American Public Power Association (APPA), Nuclear Energy Institute (NEI) and Natural Resources Defense Council (NRDC) are filed their comments December 1.

Utility company Dominion said some states, such as Virginia and North Carolina, are treated unfairly in the proposal because of the "greater and unreasonable" reductions required in emission rates relative to other nearby states. The proposed regulations could penalize states that already have reduced their carbon intensity, the company said.

Dominion suggested that EPA consider a more-representative baseline for states by using an average of multiple years and allow compliance through multi-year averaging.

The utility also said EPA needs to adjust state goals to recognize emissions improvements, efficiencies and uprates accomplished in recent years as well as recognize the value of all existing nuclear power, including Dominion's four nuclear units located in Virginia.

The Montana Public Service Commission told the EPA that assumptions in the proposed Clean Power Plan are based on an ‘old-world definition’ of the transmission grid that does not accurately represent the realities of RTO divisions.

The PSC suggested that the final rule include a ‘safety valve’ feature that would permit a state to submit its compliance plan to the regional transmission planning body for reliability review.

In the Clean Power Plan, the EPA applies a strained interpretation to an already tenuous regulatory model, the PSC said.

ERCOT conducted an analysis of the impact the Clean Power Plan would have on the reliability of the region’s grid. As part of the analysis, ERCOT modeled the impacts to generation resources and electricity costs in the ERCOT region and found that between 3,300 MW and 8,700 MW of coal generation capacity will likely retire, which could result in transmission reliability issues due to the loss of generation resources in and around major urban centers, and will strain ERCOT’s ability to integrate new intermittent renewable generation resources, according to the agency.

For Texas, the EPA has proposed an interim goal of 853 lb CO2/MWh to be met on average during the 2020-2029 period, and a final goal of 791 lb CO2/MWh to be met from 2030 onward, according to TransmissionHub.

MISO said up to an additional 14 GW of coal-fired generation could be at risk for retirement in the second phase of the Clean Power Plan. This is beyond the coal retirement figure that MISO had forecast for its service area footprint in 2011.

MISO looked at a wide array of policy and economic factors such as nuclear retirements or reactor life expansions, as well as either maintenance of existing renewable portfolio standards (RPS) to adoption of a 15 percent to 20 percent regional RPS.

The APPA said if implemented in its current form, EPA’s proposed rule will create economic inefficiency, impose additional costs on electricity customers, threaten the reliability of the electricity system, and force risky over-reliance on a single fuel — natural gas — to generate electricity.

“This rule, as proposed, aims to make unprecedented changes to the way energy will be generated and used in this country,” said APPA President and CEO Sue Kelly. “These changes will ripple over the next several decades, so they must be made carefully and collaboratively. In our comments, we’ve laid out constructive changes to make the proposed rule more likely to work in the real world and fulfill its intended purpose.”

APPA said it questioned whether the rule’s requirements go beyond what is legally permissible under section 111(d) and conflict with the authority of other federal, state and local government entities.

APPA suggested the rule allow states to choose a baseline time period that more accurately reflects their circumstances, provide full credit for investments already made and remove nuclear units under construction from the relevant state goal computations.

The NEI, representing the nuclear power industry, said EPA’s treatment of nuclear energy in its proposed carbon reduction regulations is fundamentally flawed and must be reworked.

According to NEI, the Clean Power Plan recognizes the importance of nuclear energy in reducing electric sector carbon emissions and attempts to create an incentive for states to preserve existing nuclear generating capacity.

As proposed, however, the rule does not achieve that objective. In addition, the proposed rule creates a significant, inappropriate and inequitable penalty for Georgia, South Carolina and Tennessee, where new reactors are being built.

Nuclear plants under construction in Tennessee (Watts Bar 2), Georgia (Vogtle 3-4) and South Carolina (Summer 2-3) will not begin producing electricity until between 2015-2018, yet EPA treats them in the proposed rule as though they are already operating at 90 percent capacity. There is no logical basis to include output from these plants in EPA's rate-setting formula, NEI said in a statement.

The NRDC said that is the EPA ramped up energy efficiency and renewable power, the agency could achieve substantially deeper cuts in carbon pollution from power plants than it has proposed.

NRDC said it strongly supports the proposed Clean Power Plan’s system of enabling each state to develop its own plan for meeting its carbon reduction target. At the same time, NRDC’s comments outline ways for EPA to make the plan stronger, more flexible and more effective in curbing power plant carbon pollution, in its final Clean Power Plan standards, which are due by June 2015.

EPA determined that energy efficiency could supplant 1.5 percent of retail electric sales. This figure, NRDC says, is too low because EPA didn’t include potential energy efficiency gains through such measures as building codes, transmission and distribution and voltage optimization. Factoring in those opportunities, NRDC calculates that energy efficiency can achieve savings equal to 2 percent of retail sales each year.

The Edison Electric Institute issued a statement on the EPA’s proposed guidelines that said that to satisfy the 10-year average goal, many states must achieve more than 50 percent of their 2030 emission reduction goals by 2020.

Eleven states—including Arizona, Arkansas, Florida and Minnesota—must achieve more than 75 percent of their 2030 goals by 2020. This, according to EEI, effectively turns the 2030 goal into a 2020 goal for these states.

Thus, contrary to EPA’s stated intent of providing states flexibility to achieve the 2030 emission goals, the interim compliance average goal creates more compliance challenges than it solves.

Eliminating the interim compliance goal and allowing states to determine their own reduction glide paths and milestones to achieve the 2030, or the early action alternative 2025 goals, as part of their compliance plans would provide states with real flexibility to preserve reliability and minimize costs to electricity customers, according to EEI.

Echoing the sentiment of many industry groups, EEI said EPA’s proposed compliance timeline does not allow adequate time for the needed reliability assessments and system changes to be accomplished before 2020.

EEI continues, saying that EPA incorrectly assumes that current natural gas infrastructure is sufficient to support this dramatic increase and EPA does not account for the fact that many natural gas units must back up renewable generation. Further, increasing generation from existing NGCC units also may require electric transmission upgrades and expansions.

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