Utilities Say EPA Carbon Plan May Put Reliable Power at Risk

(Bloomberg, December 1) – The Obama administration’s plan to cut carbon emissions would impose too many burdens on the nation’s electricity network, utilities warned, as supporters and critics of the climate plan squared off at a deadline.

Edison Electric Institute, which represents companies such as Southern Co. and Exelon Corp., told the Environmental Protection Agency the utilities need a “glide path” to cut greenhouse gases from their power plants over the next 15 years, to avoid endangering affordable and reliable power. Additionally, many states won’t be able to meet the goal set by the EPA, the group said. Comments on the plan were due today.

“It’s our sense that they missed the mark about how the electric system works and operates,” Quin Shea, vice president for environment at the Washington-based group, told reporters today on a conference call. “That has got to get repaired.”

The EPA’s plan is the centerpiece of President Barack Obama’s effort to combat global warming. The proposal would require a 30 percent cut in carbon emissions by 2030 from 2005 levels. The plan is designed to replace coal as the chief source for electricity generation with natural gas, renewable power and energy efficiency.

The EPA said it is combing through the more than 1.6 million comments it has received on its proposed rule, which is set to be finalized next June.

‘Too Tough’

“We’ve heard that the carbon reductions targets we proposed are too tough and we’ve heard that they’re not tough enough,” Janet McCabe, the top official at EPA responsible for the plan, said today in a blog post. “What we know for sure is that people care about this issue and we know we have a lot to consider as we work toward a final rule.”

Environmental groups are among those who say the rules aren’t tough enough. The Natural Resources Defense Council said falling prices for solar and wind power and advances in efficiency mean the EPA could actually require steeper cuts sooner, getting to a 36 percent reduction by 2020.

“We think it’s important to get reductions right away,” David Doniger, the head of climate programs at NRDC, told reporters today. “EPA can and must make its good plan even better.”

Investments Needed

Utilities said that the EPA’s framework would require new transmission networks, gas pipelines and new generation facilities that may take as long as 10 years to build, and so states will have a hard time reaching its preliminary goals by 2020. Instead of mandating cuts the begin right at the start in 2020, EPA should give states the ability to phase-in changes as they like until the 2030 final deadline.

The trade group said that it doesn’t oppose the rules overall, just some of the particulars.

“This is not about philosophy,” Shea said. “This is about the practical discussion of how this is going to work.”

Two questions drew close scrutiny from industry groups. One is the ability of power suppliers to ramp up the use of natural- gas plants to replace coal. Edison Electric said that EPA is wrong to think all gas plants could run at 70 percent of their capacity by 2020.

NRDC said that because energy efficiency is cheaper, those plants would actually only need to run at less than 50 percent of capacity to meet the standards.

Separately, utilities dependent on nuclear power urged EPA to rejigger its formula that’s meant to ensure aging nuclear fleets, which don’t emit carbon, don’t retire prematurely. The Nuclear Energy Institute said that a six percent premium placed on existing nuclear plants should be changed so that plants in competitive markets get more of a premium or more of a guarantee of survival from state lawmakers or regulators.

Original article here.