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States to weigh competing calls on US EPA carbon rules for power plants

Highlights

State energy regulators at a meeting later this month will consider competing proposals containing their recommendations for how the US Environmental Protection Agency should develop its plan for reducing greenhouse gas emissions from existing power plants.

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The draft resolutions released Wednesday by the National Association of Regulatory Utility Commissioners highlight the divisions among state officials over EPA's carbon reduction agenda, which comes as the agency is moving ahead with regulating GHG emissions from power plants under the Clean Air Act.

In June, President Barack Obama directed EPA to propose standards for existing power plants no later than June 2014 and requiring states to submit plans to EPA on how they will implement those standards by June 30, 2016.


Obama also instructed EPA to work closely with states on the matter, saying that states "will play a central role" in the process.

The competing draft resolutions, offered by Jon McKinney of the Public Service Commission of West Virginia and Joshua Epel of the Colorado Public Utilities Commission, diverge on what approach EPA should take and in emphasizing the role of coal in the power generation fleet.

While both resolutions call for flexibility in meeting the standards, McKinney's resolution said that to meet carbon reduction goals, "the states need EPA ... to issue guidelines that are based on CO2 control measures achievable at affected power plants that will produce measurable reductions in CO2 emissions at these sources."

McKinney's resolution also calls for standards that "provide for states to be able to demonstrate less stringent emission standards and longer compliance schedules for affected facilities."

Epel's resolution does not contain comparable language pertaining to less stringent standards.

And while both resolutions discuss various state efforts to reduce CO2 levels and advance clean energy, including the Northeast's Regional Greenhouse Gas Initiative and efforts to meet renewable portfolio standards, McKinney's resolution specifically highlights coal's place in the electric fleet.

"Currently a large percentage of electricity in the United States is produced by coal baseload power plants and CO2 emissions from electric generation are decreasing and will continue to decrease due to retirements of older units," McKinney's resolution said, adding that "it may be in the best interest of ratepayers to maintain the operation of coal-based electricity generating plants through the end of their useful lives that meet environmental performance requirements for priority pollutants."

Epel's resolution does not contain similar language.

But the two resolutions do share a number of passages, including that EPA's guidelines "shall not intrude on the states' jurisdiction over integrated resource planning or otherwise mandate modifications to the mix of fuels in existing and future state generation portfolios."

The copy of the resolutions obtained by Platts includes the disclaimer that the resolutions are still in draft form and "can be substantially modified" as NARUC considers them. It is unclear how the resolutions will fare when NARUC's electricity committee discusses them during the broader gathering this month.

--Bobby McMahon, bobby.mcmahon@platts.com
--Edited by Annie Siebert, ann.siebert@platts.com