Tue, Apr 28, 2015 page9

• A challenge from climate change regulations

  The electric utility industry in the US is warning that the Environmental Protection Agency’s plan to address climate change could jeopardize grid reliability

  • By Coral Davenport / NY Times News Service, WASHINGTON
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  As US President Barack Obama prepares to unveil his climate change regulations on coal-fired power plants, the nation’s electric utilities are preparing to transform the system that keeps the lights on in the US. However, some companies fear that, in the process, the lights may go out.

  This summer, the US Environmental Protection Agency (EPA) is expected to release a final set of rules aimed at forcing electric power companies — the nation’s largest source of greenhouse gas emissions — to cut those emissions 30 percent from 2005 levels by 2030. The Obama administration has consistently used 2005 as a baseline year for cutting greenhouse gas emissions.

  The ambitious rules hope to remake the nation’s electricity system by closing hundreds of heavily polluting coal plants while rapidly expanding the use of natural gas plants, wind and solar power. Officials at electric utilities say that as they make that transition — taking the nation’s largest but dirtiest source of electricity offline and replacing it with a mix of cleaner power sources — they may face power failures.

  

  Illustration: Yusha

  “If the proposed rule stands the way it is, there will be blackouts,” said Nick Akins, the chief executive of American Electric Power, an electric utility that supplies power in 11 midwestern states.

  Last week, the North American Electric Reliability Corp, a utility industry group, issued a report concluding that, as written, the proposed climate change rules could pose “a significant reliability challenge” to the nation’s power supply.

  The challenge facing utilities is steep: As they close coal plants that light millions of homes, they will need to quickly build new sources of electricity.

  Much of that will come from new power plants fueled by natural gas, which produces half the carbon pollution of coal. However, they will also build vast new wind and solar farms. Turbines built on windswept plains and solar panels built in sunny deserts will need new power lines to connect them to the grid, but siting, permitting and building such lines can take a decade. In some parts of the country, electric utilities might choose to build new nuclear plants. Nuclear power produces no carbon pollution but creates many controversies about storing nuclear waste. Companies also plan to invest in energy-efficient technology to help move and store the new power on the grid.

  In the long run, Akins and officials from other electric utilities say that they do expect to meet the requirements of the regulation by 2030. The hard part, they say, will be maintaining reliable power during the transition. In particular, they note that the EPA’s draft proposal requires states to start demonstrating significant emissions cuts as early as 2020.

  “This is going to be a major transition of the electricity system. All these things can be done, but not in that time range,” North American Electric Reliability Corp president Gerry Cauley said.

  States and coal companies are already challenging the rules in federal court, and if they are successful, the Obama regulations, as written, could fall apart. However, that would not remove the legal requirement for the EPA to regulate greenhouse gases, even under a future president.

  Across the country, the burden will be unequally spread, with states that depend most heavily on coal-fired power facing the biggest lift. Coal-fired power accounts for about 40 percent of the nation’s electricity overall, but for some states, coal supplies much of the power, while others use very little.

  In Kentucky, for example, 92 percent of electricity comes from coal. Coal powers 83 percent of Missouri’s needs and 67 percent of Ohio’s. However, the west coast states, which rely heavily on hydroelectric power and other low-carbon sources, get less than 10 percent of their power from coal.

  In California, which has already enacted an ambitious state-level cap-and-trade law to reduce carbon pollution, on top of another state law requiring generation of renewable electricity, utilities anticipate that meeting the federal regulation will simply be a continuation of business as usual.

  “California is already on track to achieve the reductions in the rule,” said Melissa Lavinson, vice president for federal affairs at Pacific Gas and Electric. “The way we’re moving forward under the California law, we’ve reduced emissions, increased renewables, and we haven’t had a problem with reliability.”

  EPA officials say they are aware of the concerns about reliability, particularly in the coal-dependent midwest.

  “There is no way that EPA is going to finalize this rule without being assured that the system will be reliable and cost-effective,” EPA Administrator Gina McCarthy said. “We are working with utilities on what needs to be tweaked.”

  A report issued in February by the Analysis Group, a consulting firm based in Boston, concluded that there were ways for states to avoid blackouts and brownouts during the power transition. The report found that if states were to adopt interstate cap-and-trade plans, along the lines of the program in place in California, they could cut pollution while keeping the lights on.

  Under such a program, a cap would be set on total pollution over a region of states, and owners of polluting power plants would pay for permits to pollute. If such programs were spread across some states with many polluting coal plants, and some states with none, it could ease the burden on heavily polluting states. Such an interstate program is already in place in the northeast.

  “That would be a way to have it work from a reliability and a carbon pollution point of view,” said Susan Tierney, an author of the study. “But if a state goes it alone and doesn’t want to join, it could be harder.”

  However, that proposal faces political hurdles. Republicans fought fiercely and successfully to kill Obama’s effort to enact a national cap-and-trade policy, which Republicans have labeled “cap and tax.” New Jersey Governor Chris Christie, who is considering a run for president in 2016, withdrew his state from the New England regional cap-and-trade program.

  States and electric utilities are continuing to urge the EPA to loosen the plan, either by extending the regulation’s timetable or by offering some sort of stopgap provision, allowing states at risk of blackouts to continue to pollute until new sources of clean power are in place.
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