Tuesday, December 2, 2014

State Says Federal Climate Change Rules Flawed, Unachievable

Ohio Environmental Protection Agency Director Craig Butler said Monday that the Obama administration's proposed limits on carbon dioxide emissions from power plants are technically erroneous and "not legal."  Director Butler's conclusion contrasts sharply with that of environmental groups, which believe the president's plan to reduce carbon emissions from power plants presents an opportunity for Ohio to grow its green energy economy and benefit from lower electricity rates.
This summer, the U.S. Environmental Protection Agency released its "Clean Power Plan" calling on states to reduce CO2 emissions 30% from 2005 levels by 2030. The agency says the proposed rules would benefit public health while reducing electricity bills an estimated 8% through energy efficiency gains and reduced electricity demand.  The U.S. EPA also recently issued separate rules calling for reductions in ground-level ozone, or smog.
Director Butler called the proposal a "massive and unprecedented overhaul of the power generation, transmission and distribution system" that would threaten reliability of the grid, reduce employment in the manufacturing and coal mining sectors and increase electricity rates.  "Ohio EPA believes the entire proposal should be reconsidered," he said in a letter to U.S. EPA Administrator Gina McCarthy that OEPA submitted along with its public comments on the rules.  "Ohio EPA has an obligation to be good stewards of the environment, and we support having a robust energy policy that is protective of public health and air quality. However, U.S. EPA's proposed Clean Power Plan is technically flawed, not legal and unworkable in its current form," he said.  OEPA said the proposal was on questionable legal ground since the 
Federal Energy Regulatory Commission delegated PJM Interconnection to dispatch power using the least expensive resource first to meet energy demand.  "Nowhere is U.S. EPA delegated authority for states to usurp the Federal Power Act and mandate generation dispatch based on CO2 emissions rather than cost," the agency said.  Moreover, OEPA said Section 111(d) of the federal Clean Air Act prohibits the federal agency from limiting CO2 emissions since it already promulgated rules for the same power plants under a different section of the law.  Director Butler said a provision in the rules that would require electric generating units achieve a 4-6% heat rate improvement, a measure of how efficiently facilities operate, is "technically infeasible."  Meanwhile, CO2 reductions derived from a 13.8 million megawatt increase in renewable electricity sources "were derived from erroneous assumptions on current state law," he said. Other reductions based on a required 16.3 million MW increase in energy efficiency measures by 2029 "are not realistic over the long term." 
OEPA said the state's alternative energy law shows that Ohio supports renewable energy and energy efficiency.  "However, this new proposal and the associated federalization measures will dis-incentivize renewable energy and energy efficiency initiatives that states like Ohio have had success implementing at the state level," the agency said. "No entity we had discussions with during our review of this proposal, public or private, communicated their desire for this state-specific activity to be afforded to U.S.EPA."  The proposed federal rules emerged just as the legislature was finishing work on a bill that eased compliance with Ohio's renewable and energy efficiency standards (SB 310). 
The Energy Mandates Study Committee, which is considering additional green energy restrictions during a two-year delay of the annual benchmarks, will likely review how the proposed climate change rules interact with the law. Ohio has already reduced CO2 emissions from 138 million tons in 2005 to 107 million tons in 2013, OEPA said in the agency's comments. Further reductions due to power plant shut downs resulting from the federal Mercury and Air Toxics Standard could further reduce carbon pollution an additional 33.8 million tons between 2015 and 2016.  "As a result of U.S. EPA's recent MATS, Ohio will lose roughly 30% of 2012's coal-fired generating capacity. As generating units install control equipment to comply with MATS, this CO2 proposal layers an even greater degree of uncertainty on the industry."  OEPA also criticized U.S. EPA's cost analysis, saying it "radically underestimates the projected cost" of electricity under the changes. The agency cited a Public Utilities Commission of Ohio analysis that indicates compliance with one provision of the rules calling for a shift to natural gas generation would cost Ohioans about $2.5 billion more for electricity in 2025.

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