Texas agencies target numerous issues with EPA’s Clean Power Plan

On Dec. 1, the Public Utility Commission of Texas (PUCT), together with the Texas Commission on Environmental Quality (TCEQ) and the Texas Railroad Commission (RRC), filed joint comments with the U.S. Environmental Protection Agency about the CO2-reducing Clean Power Plan.

The plan calls for 30% CO2 reductions from existing power plants by 2030, with each state given an individual path to meet the target.

This rule should be withdrawn due to the proposal’s numerous legal, technical, and practical flaws, the Texas agencies said. The EPA’s approach would create “tremendous disparity” in treatment of the states as well as the affected individual electricity generating units (EGUs). States where the electrical generation is predominantly coal-based would be expected to make significantly less reductions under the proposal than states such as Texas that have a diversified portfolio of generation, the agencies said.

Some states would receive credit for renewable energy generation in the state goal calculation, yet Texas, which actually produces more non-hydro renewable energy than any other state, is being penalized by EPA assuming the state can produce even more renewable energy without considering the costs and time necessary to do so, the agencies said. The existing section of the Clean Air Act that EPA plans to use for this rule does not allow the EPA to establish emissions guidelines on a state-by-state basis in such a “disparate and inequitable manner.”

Based on EPA’s Integrated Planning Model (IPM) projections of state CO2 emissions from EGUs for the proposed rule, Texas would be required to make approximately 19% of all CO2 reductions necessary for the United States. Comparing EPA’s IPM projections of the 2030 base case CO2 emissions with the 2030 policy case, Texas is expected to reduce its annual CO2 emissions by approximately 114 million short tons, which is more than twice that of the state with next highest total mass of CO2 reduction expected.

“While Texas does have more CO2 emissions from electric generation than any other state, Texas’ large electric generation is due in part to the state’s large population,” the agencies noted. “Texas is the second most populous state in the United States. Texas also has a large and diverse industry that relies on the state’s electrical system. According to the United States Census Bureau’s 2011 survey data, Texas’ manufacturing sector had a total value of shipments of approximately $671 billion, more than any other state and approximately 12% of the total manufacturing sector for the United States. However, approximately 85% of Texas’ electrical load is confined within Electrical Reliability Council of Texas (ERCOT) region. ERCOT is a finite grid with limited interconnections to other transmission regions within Texas. This constraint, coupled with the large residential, industry, and business electrical demand in thestate, is another reason why Texas is disproportionately impacted by the proposed rule.Texas has made significant efforts in developing a diversified and balanced energy generation mix.

“Texas is the nation’s leader in wind generation. In 2012, Texas produced 23% of all wind energy produced in the United States and more than twice as much wind energy as the next highest wind energy producing state. The data EPA used for this proposed rule demonstrates Texas’ efforts in developing a diversified clean energy fleet while simultaneously meeting the tremendous energy needs of the state. Yet, as detailed in the TCEQ’s comments on the proposed rule, the EPA is using these efforts to impose a more stringent standard on Texas than other states that are predominantly coal or have implemented little renewable energy.”

The TCEQ is particularly concerned about the EPA’s interim goal for Texas which is heavily affected by the EPA’s “arbitrary assumption” that a radical re-dispatching of the state’s coal and natural gas combined cycle (NGCC) fleet can occur within a few years. While the TCEQ recommends that the EPA withdraw the proposed rule, if the EPA decides to proceed with the rule then significantly more time needs to be provided to states for state plan development and implementation. At a minimum, the TCEQ recommends that the interim goals be removed from the final rule, compliance with the final goals is no earlier than 2030, and that states have until 2020 to submit state plans.

“The EPA projects that approximately 45% of Texas’ coal-fired EGU capacity will retire by 2020 as a result of the proposed rule under a state-by-state approach: 8,358 megawatts (MW) of coal capacity within ERCOT based on the EPA’s Resource Adequacy and Reliability Analysis Technical Support Document; and approximately 2,800 MW of coal capacity outside of ERCOT based on the EPA’s IPM data files. The TCEQ is concerned that the rule will actually prompt early, abrupt, and substantial shutdowns of coal-fired EGUs causing grid reliability problems and higher electric costs. The proposed rule requires existing coal-fired EGUs to improve efficiency by 6% employing measures that may trigger New Source Review (NSR) permitting and costly best available control technology for other pollutants. The EPA addresses the potential for triggering NSR permitting by suggesting utilities could avoid triggering NSR permitting by further reducing coal-fired EGU utilization. However, the EPA does not acknowledge the obvious problem that a unit must operate to produce a revenue stream and that continued reduction in its utilization diminishes a unit’s economic viability. Additionally, utilities are faced with assessing the cost of additional controls that must be installed on existing coal-fired EGUs to comply with existing environmental regulations in the context of regulatory uncertainty created by the proposed rule.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.