Power generators can meet EPA rules without reliability issues, Exelon says

A senior Exelon (NYSE: EXC) executive said the U.S. Environmental Protection Agency’s (EPA) emissions control rules can be implemented on time without affecting reliability of the nation’s electricity grid.

In a Sept. 14 statement, Exelon’s Senior Vice President of federal regulatory affairs, public policy and communications Joseph Dominguez said companies that claim they have to shut down large amounts of generating capacity are using estimates made before details of the proposed Mercury and Air Toxics Rule and the finalized Cross State Air Pollution Rule (CSAPR) were released.

Multiple utilities have said they will have to retire thousands of megawatts of coal-fired units to comply with EPA’s rules. On Sept. 12, Texas-based Luminant sued EPA saying the CSAPR would force it to close three lignite mines and more than 1,300 MW of coal-fired generation, resulting in the loss of 500 jobs.

Dominguez said power generators have time to comply with the rules. “The rules have been in the works for about a decade and the electric utility industry is well-positioned to respond, with more than 60 percent of coal-fired power plants already equipped with pollution control.”

Companies that have done little or nothing to improve or update “antiquated, inefficient plants” should start planning for compliance now, instead of “lobbying for categorical extensions or legislative delays,” Dominguez said.

Dominguez said Exelon has retired four coal-fired units in Pennsylvania while maintaining reliability on the PJM Interconnection.

“Exelon’s experience demonstrates that there are existing mechanisms that would allow the health and economic benefits of the rules to take effect as quickly as possible, as opposed to a blanket compliance extension that would unnecessarily prolong the public’s exposure to dangerous pollution,” Dominguez said. “Implementation of the rule also provides the regulatory certainty utilities need to make substantial capital investments in modernizing the nation;s electric system, which will create jobs.”

Vectren (NYSE: VVC) said in July it is also well-positioned to comply with the CSAPR without any additional significant capital investments. The company said it has installed more than $410 million of emissions control equipment on all 1,000 MW of its coal-fired generation in southwestern Indiana.

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