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Washington Week: EPA to talk Clean Power Plan repeal in West Virginia

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Washington Week: EPA to talk Clean Power Plan repeal in West Virginia

The U.S. Environmental Protection Agency will take its proposed Clean Power Plan repeal to the heart of coal country this week when the agency holds a two-day public hearing in West Virginia on plans to undo the Obama-era climate regulation.

Speakers at the hearing, which is scheduled to take place Nov. 28-29 in Charleston, W.Va., will include Murray Energy Corp. President and CEO Robert Murray, West Virginia Coal Association President Bill Raney and other coal and power industry representatives who have fought to overturn the Clean Power Plan. But proponents of the rule will also be out in force, with speakers scheduled from the Sierra Club, Mid-Ohio Valley Climate Action and the League of Conservation Voters.

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EPA Administrator Scott Pruitt at an event in Kentucky on Oct. 9, shortly before the EPA announced its proposal to repeal the Clean Power Plan.

Source: Associated Press

The Clean Power Plan was the Obama administration's signature climate regulation. The rule directed states to hit individual limits on carbon emissions from existing fossil fuel-fired power plants and provided several "building blocks" to achieve those targets, including greater reliance on natural gas-fired generation.

Opponents of the rule, including 27 states, quickly challenged the Clean Power Plan in court, saying the EPA overstepped its legal boundaries by advocating generation-shifting to other energy resources. They also argued the carbon emissions limits would be too stringent and costly for many states to meet economically.

Under the Trump administration, the EPA formally proposed to rescind the rule in October and is taking comment until Jan. 16, 2018, on the withdrawal. The move came as no surprise, with President Donald Trump panning the regulation on the campaign trail and making its repeal one of the main pillars of his energy platform.

The bigger question is whether the EPA will propose a new rule to take its place and if the successor regulation can withstand legal challenges from climate action proponents who may find it too weak. Questions also persist on whether the Trump administration will seek to undo the EPA's 2009 finding that greenhouse gas emissions endanger public health and welfare, a determination that laid the path for the agency to regulate carbon emissions from vehicles and power plants.

Those issues are likely to come up at the public hearing in West Virginia, whose coal industry has suffered in recent years from the tumble in demand from domestic utilities and a softening seaborne market for metallurgical coal.

Back in Washington

Congress is back from the Thanksgiving vacation and will focus on a range of important items that touch on energy.

The U.S. Senate this week will debate its tax reform bill, which like the U.S. House of Representatives' bill would lower the corporate tax rate to 20% from 35% and maintain many key deductions for the energy sector.

Unlike the House proposal, the Senate tax package would not extend credits for new nuclear power and smaller-scale renewable technologies, something the Senate Finance Committee may do in separate legislation later this year. The Senate tax reform bill would also maintain the federal wind production tax credit in its current form, a welcome sign from wind industry proponents upset by the House's call to weaken the PTC and toughen eligibility requirements.

In the House, the Energy and Commerce Committee's Energy Subcommittee will hold the eighth hearing in its "Powering America" series. The Nov. 29 hearing will focus on the role of financial trading in electricity markets. It comes after several other oversight hearings exploring existing power market laws and regulations and how those policies may need to be changed to adapt to a shifting fuel mix and the rise of new technologies including battery storage, demand-side management and distributed generation.

A full five for FERC soon?

At the Federal Energy Regulatory Commission, work continues on the agency's response to the U.S. Department of Energy's proposed grid resilience rule.

FERC could soon have five commissioners, with speculation growing that the Trump administration could soon swear in remaining nominees Kevin McIntyre and Richard Glick, whose confirmation the Senate approved in early November. Once the two Trump nominees are sworn in, FERC will have a full complement of five commissioners for the first time since October 2015.

With all five members on board - three Republicans and two Democrats - the commission could more fully consider the DOE's request to ensure full cost recovery for certain coal and nuclear plants in competitive markets. Relatively new FERC Commissioner Neil Chatterjee, who is chairing the agency until McIntyre is sworn in, is a strong coal supporter and has also pushed for some type of interim support for those plants until FERC comes up with a longer-term price formation strategy.

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