Analysis: The tricky business of environmental compliance

As global climate talks took place in France last week, area utility providers grapple with a series of environmental regulations coming down the pike from the U.S. Environmental Protection Agency and the Obama administration under the authority of the Clean Air Act.

The EPA unveiled its Clean Power Plan in August, and final rulings arrived two months later.

“With strong but achievable standards for power plants, and customized goals for states to cut the carbon pollution that is driving climate change, the Clean Power Plan provides national consistency, accountability and a level playing field while reflecting each state’s energy mix,” reads a statement about the plan on EPA.gov. “It also shows the world that the United States is committed to leading global efforts to address climate change.”

The plan, scheduled to be fully in place by 2030, calls for carbon pollution from the power sector to be 32 percent below 2005 levels.

Fossil fuel-fired power plants are by far the largest source of U.S. carbon-dioxide emissions, according to the EPA, accounting for 31 percent of the nation’s greenhouse gas emissions. Implementation of the plan is estimated to prevent 3,600 premature deaths, 1,700 heart attacks and 90,000 asthma attacks each year.

The EPA estimates Clean Power Plan implementation costs at $8.4 billion.

That assessment has been challenged.

A report last month commissioned by the National Mining Association from Arlington, Va.-based energy consultant Energy Ventures Analysis found the plan would result in an additional $214 billion in consumer costs nationwide. The study estimated Missouri’s wholesale power costs would increase 26 percent by 2030. Even so, according to the NMA, this effort is estimated to reduce global carbon-dioxide emissions by less than 1 percent and global temperatures by 0.02 degrees Celsius by 2100.

City Utilities of Springfield Director of Pricing and Forecasting Ray Ross Jr. said it is too soon to say how commercial and residential rates could be impacted by the Clean Power Plan.

In October, CU moved to stop burning coal for power generation at its James River Power Station to meet the EPA’s new Coal Combustion Residuals Regulations – which is separate from the Clean Power Plan. The power station at Springfield Lake has five generators – ranging from 45 to 58 years in service – now generating power from natural gas. The age of the facility makes it cost prohibitive to upgrade for coal-power generation, officials say.

The relatively new John Twitty Energy Center in southwest Springfield, however, will continue use of its two coal-burning generators. At JTEC, officials say efficiency improvements, where possible, already have been completed.

The EPA’s plan will hold states accountable for meeting plan guidelines. Should the Missouri Department of Natural Resources request an extension for submitting its final action plan, the details of its proposed course of action would be due to the EPA by Sept. 6, 2018.

Nick Seiner, communications coordinator for Southwest Electric Cooperative Inc. in Bolivar, said Missouri electric cooperatives already have invested $1.4 billion in emission-reduction controls at their power plants. Costs for energy, he said, are expected to rise to meet the state’s goal of reducing carbon-dioxide emissions by 37 percent statewide by 2030. He also said it was too soon to say to what degree rates could be impacted by the changes.

“We do know it’s going to increase our costs to generate power as 80 percent of Missouri’s electricity is generated by coal. Coal is one of the lowest cost ways to generate electricity,” Seiner said by email.

Renewables, he said, tend to be less reliable.

“To ensure our members lights come on when they flip the switch, (whether) the sun is shining or the wind is blowing, we must have a reliable generation source backing up every megawatt of renewables,” he said.

Steve Stodden, CU’s associate general manager of electric supply, said the current cost of wind energy is roughly equivalent to coal generation. Solar power, on the other hand, costs about three times as much. But those dynamics could change greatly over time, especially as demand increases for renewable sources.

In Missouri, the discussion includes whether the Clean Power Plan would ever fully be implemented.

In October, Missouri Attorney General Chris Koster joined 25 other states in a suit challenging the EPA’s authority in the new carbon-emissions rules. The suit asked the federal court to issue a stay on the regulations until their legality is determined.

Then, of course, there are changes in administration that will take place before 2030.

Daniel Ponder, a professor of political science and director of the Meador Center for Politics and Citizenship at Drury University, said future presidents could thwart or increase efforts to decrease coal use by U.S. power generators.  

“For example, a pro-coal president could offer legislation and sign it that upends regulations. This would likely only really be possible if the Senate could break a filibuster threat – so you’d need at least 60 senators willing to do so,” he said by email.

Ponder said slowing the implementation timeline would be the quickest way to undermine the Clean Power Plan. However, a future administration significantly weakening or refusing to enforce the Clean Air Act could risk a lawsuit.

“You can issue other regulations, and this would likely occur in conjunction with weakened enforcement. But this too takes time – probably a year or two,” he said. “The process is laid out: You have to propose regulations, and then they are entered in the Federal Register, where anyone interested can see and weigh in on the process. Then comments are considered by the agency – in this case, the EPA. Then, if a rule is going to go forward, it has to be entered in the Code of Federal Regulations.”  

Presidents also can appoint judges in favor of coal, Ponder said.

“While it may be difficult to simply stop or overturn the regulations – though it can be done – a president has a lot that he or she can do to delay implementation and enforcement,” he said.

For CU, the key is flexibility.

“What we’re trying to do on the power-generation side is start diversifying our portfolio a little bit and keep some flexibility moving forward – and see where some of this lands,” Stodden said.