Upton says EPA seeking to restructure state energy policy

In what might be a centerpiece of congressional resistance to the Obama administration’s Clean Power Plan, House Committee on Energy & Commerce Chairman Fred Upton (R-Mich.) suggested June 19 the Environmental Protection Agency is seeking to reshape electric regulation in the states.

During a hearing on the EPA’s proposal to decrease carbon dioxide levels from existing plant 30% by 2030, Upton cited a recent court ruling involving the Federal Energy Regulatory Commission (FERC) as limiting federal authority over state energy policy.

Where is EPA’s clear and specific grant of jurisdiction over intrastate electricity matters, Upton wanted to know?

“This is not an energy plan,” said EPA Acting Administrator for Air and Radiation Janet McCabe said during the committee hearing. The proposed rule is done to control pollution under the auspices of Section 111(d) of the Clean Air Act.

Nevertheless, the question of whether EPA’s CO2 proposal was tantamount to energy regulation was an issue that resurfaced repeatedly.

Rep. Bob Latta (R-Ohio) noted that his state recently placed a freeze on Ohio’s renewable portfolio standard. Latta questioned if such state policy changes would now require EPA approval.

Rep. Joe Barton (R-Texas) suggested that his state would have to shut down virtually all of its fossil power plants to have any hope of complying with the EPA CO2 proposal. Barton also noted Texas is a top wind generator.

Others raised questions about the “stranded” cost of coal plants that invested in emission controls for other pollutants, only to shut down as a result of CO2 regulation.

“It doesn’t regulate any particular plant to meet any particular emission rate,” McCabe said, adding that states are granted flexibility. McCabe said that EPA statistics indicate that coal was still control a major chunk of power generation in 2030.

Upon questioning, McCabe appeared to indicate that 2012, rather than 2005, is the true baseline year for EPA to measure CO2 reductions against.

Rep. John Shimkus (R-Ill.) said that Wisconsin is being penalized because it must draft a compliance plan after the retirement of the Dominion (NYSE:D) Kewaunee nuclear plant.

Rep. Adam Kinzinger (R-Ill.) said that Kewaunee’s retirement in Wisconsin “wiped out” many years of renewable energy development in the region. “It takes a lot of wind to replace a nuclear power plant,” Kinzinger said.

McCabe noted that nuclear power is a viable non-CO2 option but EPA cannot mandate that nuclear power plants continue operation.  

Various members of the panel also questioned how much credit states could get for new nuclear power generation and how much credits states can get for coal retirements taking place as a result of the mercury and air toxics standard (MATS).

Other said that most CO2 emissions are generated outside the United States, while some panel members pushed McCabe to have EPA to provide specific details on how much benefit the bill will provide to ocean levels and climate.

Other GOP members from coal-heavy states said that it appears EPA plans to retire coal plants, raise the price of electricity and, in the process, stimulate energy efficiency.

“This administration is so busy saving the Earth, they are sacrificing the American family,” said Rep. Bill Cassidy (R-La.).

“We are trying to save our coal miner jobs,” Shimkus said, holding up a poster of coal miners. “That’s why there is a lot of emotion as you might imagine.”

“If it is not a war [on coal] it is something that is pretty close to Hell,” said Rep. Morgan Griffith (R-Va.).

Democrats generally supportive of proposal

A number of Democrats on the panel voiced their support for the Obama administration proposal to curb CO2 emissions from the power sector.

Rep. Paul Tonko (D-N.Y.) said that his constituents had seen the impact of severe weather caused by climate change first-hand.

Rep. Henry Waxman (D-Calif.) deemed much of the opposition to the EPA plan alarmist. “These are doomsday claims we’ve heard them before,” Waxman said. Waxman said power generation was not shut down by previous regulation under the Clean Air Act.

Rep. John Barrow (D-Ga.) does not doubt the science behind global warming but does have doubts about the rule package put together by EPA. Barrow also questioned whether the EPA rule fully credits states like Georgia and South Carolina, which are developing new nuclear power.

Barrow also questioned the equations used to calculate Georgia’s emission reductions.

The hearing was held in conjunction with the panel’s subcommittee on Energy and Power chaired by Rep. Ed Whitfield (R-Ky.).

On a side note, McCabe said EPA cannot yet offer any details on potential federal implementation plans for states that fail to submit an adequate state implementation plan or SIP.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.