States Take Aim at Power-Plant Rules

Jul 14 - Mehr News Agency (Iran)

State regulators are descending on Washington Tuesday to make last-minute pleas for changes in the Obama administration's sweeping new rules for power-plant emissions, which will determine the direction of utility investments for decades to come and could affect the price of electricity.

California and several East Coast states want the Environmental Protection Agency to respect the steps they have already taken to cut carbon pollution in their regions and hold other states to higher standards by not easing proposed emission targets.

"We want a strong rule," said Mary Nichols , chairman of the California Air Resources Board . "There are not quite as many viewpoints as states, but it's pretty close."

Other states, including Tennessee , Ohio and Nevada , say the pollution targets put forth by the EPA are so onerous they threaten to close power plants and cost consumers substantially more to keep the lights on.

At least five governors have threatened not to comply with the new pollution rules, including those of Texas , Louisiana , Oklahoma , Indiana and Wisconsin .

The EPA has received more than four million comments so far on what the Obama administration is calling its Clean Power Plan""the most in the agency's history, according to spokesman Tom Reynolds . Once finalized in August, it is expected to face a barrage of legal challenges. In the meantime, some Republicans and coal-state Democrats have been pushing legislation to delay the rule's compliance deadlines until all the litigation is complete.

State officials, power-utility representatives and special interest groups have held meetings in recent weeks at the White House's Office of Management and Budget to share concerns and praise for the new climate-change regulations, which are the cornerstone of President Barack Obama's climate agenda.

The plan is widely regarded as the most important environmental rule to touch the electric-power industry, and is expected to change how electricity is generated and consumed in the U.S. The goal of the emissions-reduction plan is to slash U.S. carbon-dioxide emissions 30% from 2005 levels by 2030.

But achieving targets set forth under the draft rule will require huge changes to many companies' power-generation fleets. The most typical will be to cut power production from plants that burn coal, and switch to cleaner-burning natural-gas-fired power plants. Achieving ambitious carbon-reduction targets also requires new renewable power sources and deploying advanced technologies that boost the efficiency of electrical gear.

People who have met with federal representatives say the meetings are short and give participants just enough time to summarize the chief points of written filings that often run hundreds, or even thousands, of pages. There's no way to know how many changes will be made to the draft rule, attendees say, because Obama administration officials aren't showing their cards.

"They just look and listen and take notes," said Conrad Schneider of the Clean Air Task Force . "They resemble Easter Island statues."

For some utility executives, a major sticking point is the pace of the required pollution reductions. Most states would have to achieve at least half the required reduction by 2020. Many states say that deadline, five years away, is impossible to meet.

States will have to develop action plans, and it can take three to four years to build new gas-fired power plants. If new natural-gas pipelines or big electric transmission lines are needed, the process of holding public hearings and building those lines can take up to a decade.

Another point of contention concerns how nuclear power, which does not emit any carbon dioxide, gets counted under the new rules. Utilities want any of the 100 existing reactors that get license extensions to be counted as new power generation that helps states meet carbon-reduction goals.

Nick Akins , chief executive of American Electric Power Co. , said Kentucky is the only state of 11 that his company serves that hasn't raised major objections to the pollution rules. AEP relies on coal to fuel most of its generating capacity.

In a meeting last week, Mr. Akins and other executives told federal officials they were comfortable with 2030 goals, but the interim targets in 2020 don't give states time to pivot to new electric-power sources. "It was such a dramatic shift in such a short period of time that they threw up their hands and said, "~We can't do it,' " he said.

Kirk Johnson , senior vice president at the Rural Electric Cooperative Association , said his group's 900 members fear they might have to prematurely retire coal plants with $4 billion of debt on them. The utilities would have to pay off those liabilities, and then bear the higher cost of new, cleaner power plants on top of that. "It's a big darn deal for us," he said.

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