Review continues of EPA’s proposed Affordable Clean Energy Rule

Utilities and other entities continue to review the U.S. Environmental Protection Agency’s (EPA) proposed Affordable Clean Energy (ACE) Rule, which is designed to replace the Clean Power Plan, officials told TransmissionHub.

According to EPA, the ACE Rule, which establishes emission guidelines for states to use when developing plans to limit greenhouse gas emissions at their power plants:

  • Defines the “best system of emission reduction” for existing power plants as on-site, heat-rate efficiency improvements
  • Provides states with a list of “candidate technologies” that can be used to establish standards of performance and be incorporated into their state plans
  • Updates the New Source Review permitting program to further encourage efficiency improvements at existing power plants
  • Aligns regulations under CAA section 111(d) to give states adequate time and flexibility to develop their state plans

EPA also said on Aug. 21 that it will take comment on the proposal for 60 days after publication in the Federal Register and will hold a public hearing.

Analysis continues

TransmissionHub reached out to various entities following EPA’s announcement. Among those responding was the Edison Electric Institute(EEI), which, according to an EEI spokesperson, is reviewing and analyzing the details of the proposed rule and looks “forward to working with EPA, states, and other stakeholders throughout this rulemaking process.”

The spokesperson noted, among other things, that EEI is “proud that our industry has made tremendous progress to transition to a cleaner generating fleet, reducing greenhouse gas emissions 27 percent below 2005 levels as of the end of 2017, while providing affordable and reliable energy for all customers. Additionally, our industry has reduced emissions of nitrogen oxides by 84 percent and sulfur dioxide by 92 percent compared to 1990 levels.”

Similarly, a Southwest Power Pool (SPP) spokesperson told TransmissionHub: “SPP is still reviewing the proposed rule, and we’ll closely follow the development of the Affordable Clean Energy rule. We stand ready to help our members understand [its] impacts on reliability and operation of efficient energy markets.”

An Exelon (NYSE:EXC) spokesperson told TransmissionHub: “As the nation’s largest producer of emissions-free energy, Exelon has long supported policies that seek to reduce air pollution and protect public health. We are reviewing the details of the EPA’s rule to consider its potential impact on our company and customers, and we look forward to engaging in the rulemaking process.”

A spokesperson for these companies told TransmissionHub that Westar and KCP&L are following closely as EPA considers changes to power plant regulations.

“It is normal course of business for us to follow and, at appropriate times, participate as regulators consider changes that affect our business and ultimately our customers’ prices,” the spokesperson noted. “We have just started to evaluate the proposed changes. Rules can change dramatically through the review and implementation process.”

Southern Company (NYSE:SO) spokesperson told TransmissionHub that the company is reviewing the proposed rule.

“Southern Company supports a constructive and durable rule to regulate greenhouse gas emissions that is consistent with the Clean Air Act,” the spokesperson said. “Southern Company is committed to providing clean, safe, reliable and affordable energy, while transitioning towards low- to no-carbon operations by 2050. Since 2007, Southern Company has reduced CO2 emissions by 36 percent.”

Dean Seavers, president of National Grid, US, in an Aug. 22 statement, said: “National Grid believes significant and urgent action is needed to combat climate change and has long supported reasonable decarbonization policies and strategies – including the Clean Power Plan and the Paris Climate Accord. Reducing greenhouse gas emissions, while maintaining affordability and resiliency, is paramount for National Grid.”

Among other things, Seavers said that consistent with the company’s Northeast 80×50 Pathway, National Grid has adopted its service territories’ targets, in New York, Massachusetts, and Rhode Island to lower the carbon emissions 80% from 1990 levels by 2050 in the power, transportation, and heating sectors.

Seavers said that National Grid looks forward to working with EPA, states, and stakeholders to advance the decarbonization of the energy networks.

Proposed rule “does not change our plans”

We Energies spokesperson told TransmissionHub: “[W]e recently announced our plans to reduce emissions by 80% by 2050. The new rule does not change our plans to reach that goal. We are committed to balancing reliability and affordability with good environmental stewardship. We will continue to focus on retiring older, less-efficient, coal-fueled units, building advanced technology natural gas units and investing in cost-effective, zero carbon renewable generation.”

American Transmission Company (ATC), in a statement provided to TransmissionHub, said: “ATC’s transmission development is based on FERC-compliant regional analysis and local planning, in conjunction with the Midcontinent Independent System Operator and interested stakeholders. Regardless of the ACE Rule outcome, we are continuously evaluating potential solutions to enhance our capabilities for providing safe, reliable and cost-effective electric transmission service to our customers.”

NiSource (NYSE:NI) spokesperson told TransmissionHub: “We are reviewing the changes announced this week, but we don’t anticipate changes in our recently announced plan for electric generation or changes in our current environmental investments and upgrades. NIPSCO has continued to diversify its mix, including our announced plan to retire 50% of our coal-fired electric generation capacity by 2023, which began with our Bailly facility in May. Beyond complying with the new rule, NIPSCO and NiSource are continuing to outpace the industry as well as the targets outlined in the prior rule regarding carbon emission reductions.”

Frank Prager, vice president, Policy and Federal Affairs for Xcel Energy (NYSE:XEL), in a statement provided to TransmissionHub, said: “We have had tremendous success working with our states on clean energy strategies that will reduce our carbon emissions 60 percent by 2030 company-wide from 2005 levels. While we are reviewing the proposed rule, we remain committed to achieving our carbon emissions goals and implementing plans that will deliver the reliable and increasingly clean energy our customers want, while keeping their bills low.”

Great River Energy in an Aug. 21 statement said that it will continue its plans to evolve its power generation portfolio and pursue its goal of achieving 50% renewables by 2030.

“We also will continue to find ways to improve the operational, economic and environmental performance of existing power plants,” Great River Energy said. “Great River Energy makes decisions based on what is best for our member-owner cooperatives while continuing to operate all of our generation resources in an environmentally responsible and economic manner.”

Great River Energy said that it is studying EPA’s proposed rule and is analyzing its impact on Great River Energy’s power plants. Great River Energy said that after that analysis is complete, it will likely submit comments to EPA on the proposed rule, and if the rule is finalized, Great River Energy will participate in the process to develop the plans of Minnesota and North Dakota to implement the rule.

An Idaho Power spokesperson told TransmissionHub that Idaho Power will continue to reduce emissions, while providing modern, reliable, and affordable energy to its customers, with or without EPA’s new rule.

Idaho Power has been voluntarily reducing its own greenhouse gas emissions since 2009, the spokesperson said, adding: “In 2017, the board of our parent company, IDACORP, approved an extension of our CO2 emissions intensity goal, which is to reduce CO2 emissions intensity 15-20 percent below 2005 levels through 2020. In addition, we are continuing a glide path away from coal generation as outlined in our long-term Integrated Resource Plan (IRP).”

Idaho Power is part-owner of three coal-fired plants, the spokesperson said, adding that the Boardman, Ore., plant is slated to stop coal-fired generation by the end of 2020.

“We are negotiating early shutdown of the North Valmy (Nevada) plant with co-owner NV Energy, and we are evaluating options for the Jim Bridger plant in Wyoming, where we share ownership (1/3) with PacifiCorp/Rocky Mountain Power (2/3),” the spokesperson said. “These decisions are based on economics. We evaluate our resource mix and options for future generation every two years, and we will consider new regulatory developments as we begin putting together the 2019 IRP.”

ITC spokesperson Bob Doetsch told TransmissionHub, “State energy goals, market factors and consumer demand are steadily moving the U.S. toward a more diverse mix of energy sources – regardless the direction of federal energy policy. Modern, robust and flexible transmission infrastructure is needed to facilitate any future energy scenario and deliver lower-cost energy to customers.”

Impact on renewable energy, transmission plans

On what the proposed rule means for the development of renewable energy, Doetsch said: “The march toward a more diverse energy future is well underway, driven by state energy goals, market factors and consumer demand. A big part of our nation’s energy future will involve transporting renewable power from remote or rural locations to population centers. Modern, robust and flexible transmission infrastructure will be essential to the nation’s successful transition to a larger share of renewable energy.”

The Idaho Power spokesperson said: “It’s difficult to say what the long-term impact on renewable energy development will be. Idaho Power has a significant amount of renewable energy from a wide range of sources, including wind and solar, on its system. Most of this comes from private developers that sell energy to Idaho Power. For the past decade, we have seen a fairly constant stream of proposals for additional renewable projects. Most of those fall under the Public Utility Regulatory Policies Act (PURPA), which requires us to purchase all of the energy produced by qualifying facilities. Past regulatory changes have not significantly impacted the number of these proposals. We aren’t really in a position to evaluate the economic viability of particular projects.”

On how the proposed rule affects Idaho Power’s plans for electric transmission development, the spokesperson noted that the company is involved in two significant transmission projects – Gateway West from Wyoming to western Idaho, and Boardman to Hemingway (B2H), which would link the company’s system to the Mid-Columbia trading hub near Boardman.

Among other things, the spokesperson said that both of those projects have been reviewed through multiple planning cycles, adding, “We are continuing to develop these projects and do not anticipate any impact from the proposed regulations.”

Doetsch said that ITC is working on the national, regional and state level to assist in planning for a more diverse energy future, including the critical role of transmission to facilitate the connection and transport of all energy sources in that future, to the ultimate benefit of customers.

“The further integration of diverse sources of energy generation will require policymakers and regional planners to implement workable interregional transmission planning processes, and in turn build the identified needed infrastructure,” he said.

The spokesperson for Westar and KCP&L noted: “As Kansas continues to develop wind energy, we watch for opportunities where adding wind to our generation resources benefits our customers. Likewise, as transmission needs are identified, we will evaluate opportunities to build and operate new lines.”

Proposed rule sparks support, opposition

Duke Energy (NYSE:DUK) spokesperson told TransmissionHub: “We see EPA’s proposal as fitting with the agency’s statutory authority while recognizing the important role states play in our generation planning. The ACE rule is the right step toward achieving further regulatory certainty in regulating CO2 emissions – certainty that we have long advocated for. We look forward to actively participating in the regulatory process and continuing to take actions that drive carbon emissions out of our system regardless of the rule.”

An American Electric Power (NYSE:AEP) spokesperson told TransmissionHub that the proposed “rule appropriately focuses on actions that can be taken at coal-fired power plants to improve efficiency and provides states with a key role in developing specific requirements for individual sources, both consistent with EPA’s authority under the Clean Air Act.”

The spokesperson said that AEP’s business strategy – which, as she noted, is focused on modernizing the power grid, expanding renewable energy resources, as well as delivering cost-effective and reliable energy to its customers – will not change. AEP has cut its CO2 emissions by more than 57% from 2000 emission levels, and the company has established a clean energy strategy with a goal to achieve an 80% reduction in carbon dioxide levels from its fleet of power plants by 2050, the spokesperson said.

Among other things, the spokesperson said that AEP expects to achieve future carbon dioxide emission reductions through a variety of actions, including investments in renewable generation and advanced technologies. The spokesperson noted that AEP will review EPA’s proposal in detail and submit comments to EPA during the public comment period.

American Public Power Association President and CEO Sue Kelly, in a statement provided to TransmissionHub, said that the association “supports the Environmental Protection Agency’s proposal to replace the Clean Power Plan with new guidelines to regulate CO2 emissions from fossil fuel-fired power plants. The new plan respects the legal limits of the Clean Air Act while comporting with prior Supreme Court precedents on CO2, and gives states needed flexibility when it comes to setting performance standards for electric generating units.”

Among other things, she said: “Additionally, the rule provides a framework that recognizes each state’s unique conditions and avoids interfering with established state energy policies. The Association supports guidelines that are straightforward, flexible, source-specific, achievable at different loads, and cost-sensitive.”

Kelly also said that the association looks “forward to participating in EPA’s rulemaking to finalize its proposal so that our members—community-owned, not-for-profit electric utilities—can make long-term planning decisions and investments to best serve their customers with reliable, affordable, and environmentally responsible power.”

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, in an Aug. 21 statement, said: “We disagree with the Trump administration’s regressive approach to regulating climate change by directing the states to address this global problem. We believe that by deploying solar and other renewable technologies, there are ways to reduce pollution of all sorts and provide electricity to Americans at a lower cost. New solar energy will create tens of thousands of jobs and inject billions of dollars of investment into the economy.”

Among other things, she said: “With or without this new proposal, solar will continue to grow, power the economy and provide the clean energy that consumers want and the grid needs.”

Delaware Gov. John Carney, in an Aug. 21 statement, said, for instance: “The Clean Power Plan set national targets for carbon emission reductions, but provided flexibility for the states to determine how best to achieve these targets. We have worked hard in Delaware to reduce our greenhouse gas emissions, and partner with other states in addressing pollution that feeds rapid climate change. This proposed replacement of the Clean Power Plan will make our efforts to reduce carbon pollution more difficult, and will remove a strong incentive for state and federal governments to work together to clean up our air.”

He continued: “Put simply, it’s a bad idea to abandon any tool we have to fight climate change together. Through the U.S. Climate Alliance, we are already working with states to uphold the goals of the Paris climate agreement. But today, I join leaders across our country in calling on the Trump Administration to abandon this new proposed rule and reinstate the Clean Power Plan so we can provide the global leadership necessary to confront this threat.”

Vermont Gov. Phil Scott, in an Aug. 21 statement, said: “Today, the EPA is poised to replace the national program put in place to significantly reduce greenhouse gas and harmful air pollutant emissions with a program that keeps allowable levels about the same. The U.S. must continue to provide responsible environmental leadership, and the proposed replacement for the Clean Power Plan does not appear to live up to the Environmental Protection Agency’s (EPA) mission or provide the national leadership we need in this area.”

Among other things, Scott said: “As communities across the country deal with the impacts of climate change and air pollution, this is simply the wrong approach. A better path forward would be to come together on a bipartisan basis to reduce emissions and advance clean and affordable energy.”

About Corina Rivera-Linares 3058 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.