January 15, 2016 | By Barbara Vergetis Lundin

New studies have emerged, confirming that the Environmental Protection Agency's final Clean Power Plan (CPP) can achieve significant reductions of carbon pollution from the nation's power sector while preserving a diverse energy mix and saving consumers money.

Credit: Stuart Miles/Freedigitalphotos.net

The Clean Power Plan requires states to meet targets that together would reduce national electric sector emissions to about 32 percent below 2005 levels.

An M.J. Bradley & Associates analysis shows that the CPP will increase investment in cost-effective clean energy resources, such as renewables and energy efficiency, and can result in savings for customers on their electric bills. 

M.J. Bradley analyzed 14 scenarios for implementing the final Clean Power Plan, announced by the EPA on August 3, 2015 and finalized in October 2015, with insights and constructive feedback from several utilities, trade associations and NGOs, including the Natural Resources Defense Council.

The scenarios included the use of varying amounts of energy efficiency; different degrees of compliance flexibility to trade carbon pollution allowances and credits; and the policy options of a mass-based approach that would limit the total amount of carbon pollution in a state, or rate-based approaches that curb the emissions intensity (pounds of carbon pollution per megawatt hour of generation) of power plants.

States and utilities that increase investment in energy-efficiency programs will see a reduction in the costs of complying with the Clean Power Plan because plants will purchase less fuel and fewer new power plants need to be built, the analysis shows.

"This comprehensive analysis shows that, by various pathways, the Clean Power Plan's carbon pollution reduction goals are very achievable," said Christopher Van Atten of M.J. Bradley & Associates. "The nation's electricity sector can significantly reduce carbon dioxide emissions, and employing a mix of clean energy resources will both help clean up the air and cut costs of doing so."

The analysis found that the U.S. electricity sector can achieve the Clean Power Plan's goals to reduce carbon pollution emissions by more than 30 percent from 2005 levels by 2030 using a diverse mix of resources, including energy efficiency, renewable power, nuclear, natural gas and coal. Wind and solar installations are projected to continue growing under all of the modeling scenarios and, in 2030, renewable energy is projected to supply between 11 percent and 15 percent of U.S. electricity.

EPA requires that mass-based state plans address the potential for "emissions leakage." Leakage results from the incentives under a mass-based plan to shift generation and emissions to new fossil-fired power plants outside the program. The analysis shows that CO2 emissions would increase with an "existing only" mass-based program versus an "existing plus new" source program.  The most straightforward approach to address this issue is for states to adopt the "existing plus new" source mass limits, the analysis contends.

Based on the models performed, EPA's proposed allocation approach to mitigate leakage would have a minor impact on emissions leakage.  Through the regulatory process, EPA is taking comment on the issue and stakeholders are working to offer EPA alternative allocation approaches that could be more effective, according to the analysis.

Synapse Energy Economics, Inc. has found that using strong energy-efficiency policies in state implementation plans can produce significant electricity bill savings for consumers while reducing carbon pollution.

"We found that if states comply with the Clean Power Plan through strategies that encourage cost-effective energy efficiency, households can expect to save an average of $17 per month on their electric bills by 2030 compared to a reference case that does not comply with the rule," said report lead author Patrick Knight. "In short, the Clean Power Plan saves money for consumers in states that maximize energy efficiency and clean energy investments."

Synapse's state-by-state modeling found that Clean Power Plan compliance will also result in consumer electricity bill savings in every state that maximizes energy efficiency and clean energy investments. The biggest emission reductions don't necessarily mean the highest costs for consumers.

"In fact, the states with the largest bill savings don't have energy-efficiency policies today. These states have the most to gain from using energy efficiency to comply with this new regulation," said report co-author Dr. Elizabeth A. Stanton. "The largest bill savings were also found in states with higher poverty rates."

While there has been ongoing public, legal, and legislative debate regarding the economic impacts of reducing carbon pollution from power plants, particularly with respect to consumer electric bills, the Synapse report contends that energy efficiency has the potential to keep customers' bills low.

"Our analysis confirms that energy efficiency is one of the most cost-effective ways to reduce and avoid emissions from power generators," Knight said. "The Clean Power Plan provides states with significant flexibility to harness this resource in their compliance plans in a way that protects consumers." 

For more:
- see this report

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