Some Parts of Clean Power Plan Will Stick, Panelists Say

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By Nushin Huq

Feb. 25 — While the Environmental Protection Agency's Clean Power Plan might be overturned, the trajectory towards lower carbon emissions is here to stay, panelists said in Houston on Feb. 25.

Ohio took a dual path approach to the Clean Power Plan, both challenging the rule as well as preparing for implementation in case it survives legal challenges, Asim Haque, a commissioner at the Ohio Public Utilities Commission, said at the IHS CERAWeek conference.

On the other hand, Texas is holding off on moving forward on any actions to comply with the plan.

“We're going to wait until the final rules,” said Toby Baker, a commissioner at the Texas Commission of Environmental Quality. “I do feel like it will change from what it is now.”

Other states have tried to get in front of prior environmental regulation, and then have had to backtrack when final rules change, Baker said.

The U.S. Supreme Court stayed the implementation of the Clean Power Plan. Many states halted the efforts to implement the plan while other states, such as Minnesota and Colorado, have continued with plans for compliance .

There is definitely a drive toward clean energy that has grown, with or without the new rule, Haque said.

“Power delivery was always framed in terms of safe utility services, cost-effective services, reliability,” Haque said. “Now you have to add `cleaner.' The drive is there. When I first started as a lawyer, the environmental groups were fringe movements. Now it's mainstream.”

Industry Moving to Cleaner Power

The transition is already going on in industry, and the transition to low carbon will continue, said Scott Weaver, manager of strategic policy analysis at American Electric Power, a large power company based in Columbus, Ohio.

“We have significant issues with the rule,” Weaver said. “But a lot of parts of the Clean Power Plan are sticky. By sticky, I mean the idea of limiting carbon isn't going away. Some type of carbon rule will ultimately stay.”

Jack Ihle, director of environmental policy and emerging technology for Xcel Energy, agreed that the transition to lower carbon power generation is already underway. He said his company, a power provider in states that include Minnesota and Colorado, wanted an earlier base year for the Clean Power Plan.

“We wish the baseline year was 2005 so we could have gotten credit for all the renewable investment already made,” Ihle said. “What we're hoping for now is that the current baseline is not moved up from 2012 to 2015.”

Texas' Baker questioned whether the regulation was needed given that the current trajectory in industry was towards a lower carbon emissions.

Leakage Rules Criticized

The panel also touched on some specifics of the rule and how it would be implemented if it survived.

Weaver and Ihle criticized the leakage rules in the plan, saying they presented practical and legal problems. Leakage refers to when power companies shift generation to new natural gas-fired power plants that aren't subject to the Clean Power Plan's requirements and face less stringent emissions limits.

“I think leakage was put in because they were worried that companies would do a run round the existing facilities cap and build new combine-cycle plants,” Ihle said. “It's unlikely that companies would do that.”

Haque, the Ohio commissioner, said that from a regulatory perspective, many states are not including all the necessary state agencies coming to the table to plan for compliance.

“There are states where the public utilities commission is not involved in discussions around this plan,” Haque said.

To contact the reporter on this story: Nushin Huq in Houston at nhuq@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com