West Virginia agency releases study on Clean Power Plan impacts

The West Virginia Department of Environmental Protection (WVDEP) said April 21 that it has submitted a feasibility study to the state Legislature related to the U.S. Environmental Protection Agency’s Clean Power Plan for existing power plants.

The Clean Power Plan, which would cut greenhouse emissions from existing power plants by 32% by 2030, has been put on hold by the U.S. Supreme Court pending appeals court review. That hold has caused several states to suspend their efforts to come up with state implementation plans under that rule.

The West Virginia study was mandated by House Bill 2004, which passed the Legislature in 2015. It looked at the feasibility of developing a state plan for the regulation of emissions of carbon dioxide, a greenhouse gas, in order to comply with the requirements in the U.S. EPA’s rule, which was stayed by the U.S. Supreme Court in February pending the outcome of a legal challenge led by West Virginia’s attorney general.

The study is a comprehensive analysis of the potential effects the rule – which is under 111(d) of the Clean Air Act – on the state, its people and its economy.

The WVDEP said it will not develop a state plan to comply with the 111(d) Rule unless the stay of the Clean Power Plan is lifted. If a state plan is developed, the agency would be charged with drafting such a plan and submitting it to the Legislature for approval before submitting it to the U.S. EPA.

To conduct the analysis the Legislature required, the WVDEP:

  • solicited information from the owners of the state’s electric generating units (the main utilities in the state are subsidiaries of American Electric Power and FirstEnergy);
  • hired Marshall University’s Center for Business and Economic Research, which subcontracted with consultant Energy Ventures Analysts of Arlington, Virginia, for economic and market analysis of the impact of the 111(d) Rule;
  • identified parties from business, labor, environmental and public interest groups and governmental agencies with potentially useful information concerning this assessment and solicited their input;
  • notified the public of the feasibility assessment and comprehensive analysis and accepted and reviewed comments; and
  • conducted independent research on topics related to the assessment and analysis.

The study noted that over 95% of the electric power generated in West Virginia comes from coal. West Virginia has historically produced about two and a half times its own power needs, with the excess being exported to other states. However, coal produces the highest CO2 emissions of any source of fuel for generation of electricity. Accordingly, the EPA’s 111(d) rule targeting these emissions, in combination with other federal environmental regulations and the forces of a changing energy market place, can be expected to have a profound impact on West Virginia’s power industry, coal industry and overall economy.

EPA’s mandate for a 29% reduction in the number of tons of CO2 emitted from existing coal plants in the state is equal to a reduction of 21 million tons from 2012 levels, the study said. West Virginia’s CO2 emissions have already been reduced by the closure of six coal plants, mainly due to EPA’s MATS rule, that emitted 4.4 million tons of CO2 in 2012. These closures may provide a jumpstart toward meeting EPA’s mass limit for the state. The 4.4 million tons of CO2 these plants produced in 2012 is 6% of the 2012 total. Assuming other coal plants in the state have not increased their output since then, the state would need additional reductions of 23% or 16.6 million tons from 2012 levels to reach EPA’s final mass limit.

Other developments that impact state plan decision making are ongoing, the study added. EPA is working on related rule proposals, including one which will establish a federal plan for states that fail to develop a state plan, plus model trading rules for both the rate and mass-based compliance approaches. The content of these rules, when finalized will inform state plan decisions.

The North American Electric Reliability Corp. (NERC) is finalizing its assessment of the 111(d) rule’s impact on reliability of the grid. PJM Interconnection, the operator of the grid in West Virginia, is expected to finalize an economic analysis of the 111(d) rule in June and a reliability analysis of it in July. These and other analyses of the final 111(d) rule should be considered in state plan development.

The compliance approaches other states take may have a significant impact on the economics of the path West Virginia chooses.

Should the 111(d) rule be upheld, West Virginia may have difficulty developing a timely state plan submission due to all of the legislative approvals required, the study said. Over three successive legislative sessions, WVDEP would have to obtain legislative approval of the changes in state statutes that are necessary to develop a state plan, approval of legislative rules that will comprise the enforceable portion of the state plan, and approval of the state plan itself. Very little time will be available to engage stakeholders and the public in order to develop a consensus around a state plan approach before a plan must be proposed.

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.