The U.S. EPA’s proposed Clean Power Plan is a fundamentally flawed work, on both a legal and practical level, and a proposed new bill from U.S. House Republicans to stop it is a good idea, said Lisa Johnson, CEO and General Manager of Seminole Electric Cooperative, who will testify on April 14 on behalf of the National Rural Electric Cooperative Association.
On April 14, the House Subcommittee on Energy and Power will hold a hearing, “EPA’s Proposed 111(d) Rule for Existing Power Plants, and H.R. ___, Ratepayer Protection Act.” The blank space for the bill number is because this proposal hasn’t been formally introduced yet by its sponsor, Rep. Ed Whitfield, R-Ky.
“Seminole has significant concerns about the legal and technical validity of the Environmental Protection Agency’s (‘EPA’) Existing-Source Proposal, termed the Clean Power Plan (‘CPP’), and the proposal’s substantial impacts on Seminole, its Members, and their consumers, Florida’s electric system, and the citizens of Florida,” wrote Johnson in her prepared testimony for the hearing. “We believe that Chairman Whitfield’s ‘Ratepayer Protection Act’ will provide both Seminole, and the State of Florida, with significant protections against massive rate hikes and damage to the reliability of Florida’s grid due to EPA’s CPP.
“EPA’s own modeling projects that more than 90 percent of Florida’s coal-fired generation would be forced to prematurely retire in order to achieve Florida’s goal, a 38 percent reduction in greenhouse gases (‘GHG’), specifically carbon dioxide (‘CO2’). This includes Seminole’s 1,300 megawatt (‘MW’) coal-fired facility. Serious fuel diversity, reliability, and cost concerns would result if, as EPA projects, natural gas-fired combined-cycle (‘NGCC’) units are required to produce more than 85 percent of Florida’s electricity in 2025, and coal-fired units less than 2 percent. The truth is that Florida cannot comply with EPA’s proposal using its existing utility investments, and the overall utility cost impacts would likely total in the billions – and perhaps tens of billions – of dollars.
“Moreover, Florida is disproportionately impacted. Florida’s goal is more than twice that of several other states and more than 25 percent above the national average. EPA’s goals also penalize Florida for its already-significant percentage of gas-fired generation. Seminole, in particular, would suffer substantial harm as a result of EPA’s proposal, a reality that EPA has failed to, but must, address. EPA projects that Seminole would lose at least 20 years of remaining useful life of its coal-fired units, and operate its gas-fired facility at a substantially reduced capacity; the cost of these losses, in addition to the cost of replacement generation, would be borne by its Members and their consumers.
“EPA also does not recognize Florida’s unique characteristics, such as its peninsular geography and accompanying transmission constraints, reliability concerns from over-reliance on a single fuel, limited options for renewable power, and its existing statutory and regulatory framework. EPA must take these important factors into account and correct the numerous flaws in its proposal.”
Johnson says EPA has no current legal authority over these emissions
“Regarding legal flaws, there is serious doubt if EPA has the authority to issue ANY proposal regulating GHGs from existing electricity generating units (‘EGUs’),” Johnson added. “Even assuming such authority, EPA’s proposal contains numerous other legal flaws, such as EPA’s lack of authority to set national energy policy, its usurpation of state authority, its regulation of entities outside-the-fence, its arbitrary deadlines, and its failure to provide states with a meaningful opportunity to consider an EGU’s remaining useful life.
“EPA’s proposal also contains numerous technical flaws, such as the reliance on inaccurate data and false assumptions in its Building Blocks, goal calculations, and compliance modeling.” Johnson added that:
- In Building Block 1, EPA’s 6% heat-rate improvement assumption for coal plants is clearly erroneous, especially for units like Seminole’s, which have already maximized heat rate.
- In Building Block 2, EPA failed to address the feasibility of increasing NGCC capacity to 70%, including whether sufficient natural gas is available on a national, regional, state or local level, whether there is adequate gas-pipeline infrastructure, whether there is adequate transmission infrastructure, and what impacts such a shift will have on fuel diversity and reliability.
- In Building Block 3, EPA misinterpreted and inappropriately applied the renewable portfolio standard of a single state to the entire southeast region, including Florida.
- In Building Block 4, EPA failed to recognize that consumer behavior determines how demand-side energy efficiency programs will be implemented.
Bill would freeze compliance with the final plan until the courts have spoken
On March 23, Whitfield released a discussion draft of the “Ratepayer Protection Act.” The legislation would allow for judicial review of any final rule addressing CO2 emissions from existing fossil fuel-fired electric generating units before requiring compliance with the rule, and also allow states to protect households and businesses from significant adverse effects on electricity ratepayers or reliability.
Janet McCabe, Acting Assistant Administrator Office of Air and Radiation at EPA, in her prepared testimony at one point says the Obama Administration has no position on the discussion draft of the bill, but at another point calls it “premature, unnecessary and ultimately harmful.”
She added: “It is premature because the rule has not been finalized yet. As I mentioned, we are looking closely at the input we received, and will be making adjustments to the rule to address many of the concerns that have been raised. It is unnecessary because, as this testimony – as well as the proposal itself – explain, EPA has the tools as well as the obligation to address issues related both to cost and to reliability and we have made clear our commitment to do just that when we issue the final rule this summer. And, finally, the bill, if enacted, would do real damage by delaying or preventing the climate and air quality benefits that will be achieved through the timely implementation of this lawful Clean Air Act program. The proposal we issued in June of last year rested on a firm legal foundation.”
McCabe also wrote: “Although members of Congress have routinely expressed concern with EPA’s rules and their legality over the years, we are not aware of any instance in the last 25 years when Congress has enacted legislation to stay implementation of an air rule during judicial review. To do so here, before the rule is even final, would be an unprecedented interference with the EPA’s efforts to fulfill its duties under the Clean Air Act—an Act that was written and passed by Congress with bipartisan support and that has brought improved public health to millions of Americans for decades.”