Listening sessions held by the Department of Environmental Protection around the state are gathering comments on EPA’s Clean Power Climate Plan to help Pennsylvania develop a plan for meeting those requirements.

Mike Butler, Executive Director for the Consumer Energy Alliance’s Mid-Atlantic Chapter, presented these comments at the October 5 session--

My name is Mike Butler, and I serve as the Executive Director for Consumer Energy Alliance’s Mid-Atlantic chapter. CEA is a nationwide association with 400,000 individual members as well as energy consumers and producers working to advance an all-of-the-above energy policy and diverse power supplies to help lower energy costs for every American.

Access to supplies of affordable and reliable energy is vitally important to our members. The cost of energy is imbedded in nearly every good and service consumers enjoy.

When electricity prices spike for consumers and energy-intensive manufacturers, it essentially acts as a regressive tax for families and seniors on fixed incomes. Higher rates means very difficult choices for hard-hit communities, those struggling to make ends meet, and working families that may have to give up what small luxuries they could afford or forego buying their kids news shoes or clothes for school.

For businesses, every dollar spent on energy is a dollar that cannot be spent on capital investments, payroll, savings, their employees’ healthcare, or hiring that young person fresh out of school looking to join the workforce.

It is critical that these forgotten voices are elevated when we are discussing the impact the Clean Power Plan will have on economic growth and rates for Pennsylvania’s families, farms, factories and small businesses.

CEA strongly believes that a balanced electricity mix that is focused on rate affordability and power reliability is ultimately the best course for consumers and the environment. That means providing optionality for all forms of energy including coal, natural gas, nuclear, renewables, and other energy efficiency measures.

A lot is at stake for Pennsylvania in the Administration’s finalized Clean Power Plan, and that is why I appreciate the opportunity to speak today.

Our state currently has a well-balanced portfolio of energy production from coal, natural gas, and nuclear power. In fact, the Energy Information Administration (EIA) notes that Pennsylvania was the second-largest power producer of nuclear.

CEA’s concern is that balance may be put in serious jeopardy by the Clean Power Plan, and unfortunately, consumers will pay the price due to imbedded mistakes and arbitrary regulatory timelines.

CEA filed comments on the proposed plan last December, which raised the following general concerns:

— Cost: The proposed plan would, at a minimum, impose at least $41 billion in yearly compliance costs to the public.

— Reliability Impacts: The proposed plan was projected to remove 45 gigawatts of baseload coal off the grid, which is the real-world equivalent of removing the entire power capacity of New England. This dearth of baseload power capacity would be felt most acutely in the Midwest and in Mid-Atlantic and Southern states. Since that time, EIA has moved that plant retirement projection upwards to an expected 90 gigawatts of baseload coal.

— Truncated Compliance Timelines: State regulators were put in the impossible position of devising an honest, robust, and legally defensible implementation plan in one year for a ubiquitous substance (CO2) that had never been regulated before.

Typically, the Clean Air Act allows states several years to develop plans for listed pollutants that are much smaller in nature and have actual available abatement technologies. Further, the so-called “glide path” for compliance unfairly forced many states to lock in the majority of its required emissions cuts far before the much-advertised 2030 deadline.

There was no physical way to raise capital or approve, permit, and construct the untold amounts of needed pipeline and transmission infrastructure to meet the Clean Power Plan’s objectives; and

— Unfair Treatment of Nuclear: No honest discussion about climate change or Clean Power Plan compliance obligations is serious unless it includes nuclear power — the only emissions-free baseload power we have. The draft plan pocketed the emissions of new plants that were under construction and assumed for compliance purposes they were up and running. Further, it capped the ability to count efficiency improvements at existing plants as part of compliance but did not do so to other zero-emitting technologies.

On August 3, the EPA released the final Clean Power Plan. For history buffs, it is worth noting the original part of the Clean Air Act that unleashed this 1,550-page regulation is only one page and has been lightly used over the past 40 years.

Although we are still analyzing the full impact of the final rule, CEA notes the following observations:

— More stringent targets for Pennsylvania and the nation: The final rule actually increased Pennsylvania’s emissions cut requirements over the draft. In fact, 16 other coal-dependent states saw their emissions targets greatly expand over the life of the rule and the nationwide emissions reduction goal was raised another 10 percent.

— Additional Time: States have been given an additional two years before final emissions cuts kick in, however, this additional time is only granted to states submit plans and progress reports on time. In reality, an additional two years means very little considering the enormous planning and infrastructure development that will be necessary to comply with the final rule.

— “Cooperative Federalism” is a Farce: The emissions targets and timelines in the rule were forced on the states. States that choose not to comply are forced into a federally mandated cap-and-trade plan, regardless if the state legislature has approved its participation.

States whose compliance plans deviate from the proposed guidance are likely to be forced into the regime as well. What is most concerning is that final guidance on the federally enforced cap-and-trade plan will not be released until after SIP plans are due into EPA.

— Reliability Mechanism: CEA is pleased that the EPA realized it had to acknowledge the very real reliability threats its proposal was setting up, especially considering the critical comments of non-partisan grid regulators and federal grid regulators like the North American Reliability Corporation (NERC).

However, the reliability mechanism included in the final rule appears to be impractical without additional guidance or consultation with grid managers. For example, states must notify the EPA 48 hours ahead of time for an unforeseen emergency requiring a fossil fuel plant that has or is scheduled to go offline to be re-started.

CEA is unaware of any blackout or reliability problem that grid managers knew of two days in advance.

— Nuclear Power Treatment: The final rule removed many of the unfair proposals and treatment of existing nuclear power plants; however, it begs the question: Why were they included in the first place? If the agency and the Administration are serious about reducing carbon emissions and providing baseload power, more should be done to incentivize relicensing of existing plants and building new units.

— Renewables Expansion: CEA is very supportive of all forms of renewable energy and proudly has several wind and solar members. The Administration’s goal under the rule is to boost renewables to 28 percent of our nation’s electricity mix by 2030. Pennsylvania currently generates 4 percent of its electricity from renewables. To fully understand the significant challenges in growing electricity generated by renewables by 700 percent, consider that Pennsylvania currently has the 16th greatest wind production in the nation, yet that entire sizable wind power infrastructure does not produce as much electricity as one coal fired power plant.

As DEP moves forward with establishing its own SIP plan, we encourage you to considering the following:

— Keep the energy bills of consumers, regular people, and energy-intensive manufacturers in mind in whatever policy you set.

— We recognize that the DEP has set an ambitious outreach schedule and we applaud your willingness to be active with the public. However, we strongly encourage the agency to take all the time the EPA will allow when developing your SIP plan. Getting the plan done correctly is far more important than submitting it quickly.

We are not aware of any energy-producing state that is moving on a submission timeline this quickly. Since the EPA is providing additional time to construct a compliance plan, we urge the DEP to take full advantage of that additional time to ensure an optimal plan is submitted.

— It is our understanding that the DEP is considering pursuing “trade-ready plans” as parts of its compliance approach. We remain concerned about several procedural and practical questions left unaddressed by this option.

First, how can DEP create a cap-and-trade program or establish an economic value to a credit-trading program has not been authorized by the legislature? Absent a formal interstate compact, how could such agreements and obligations be enforced? Should power be exported out of state lines, who would get credit for emissions reductions or increases?

— Now that the rule is finalized, we strongly encourage the DEP and the PUC to develop a cost-benefit, state reliability analysis that examines real world scenarios that could be envisioned in a carbon-constrained world. Consumers and the public need to know from their regulators what the range of costs may entail and have the opportunity to offer public comment.

A complete copy of Butler’s comments is available online.

The next listening sessions will be held October 22 in Lehigh County, October 28 in Schuylkill County, October 29 in Erie, October 30 in Clarion and Clearfield counties and November 4 in Lycoming County.

For more information, visit DEP’s Climate Change webpage.  Comments on the Clean Power Plan can be submitted online.  Click Here to see comments submitted by others so far.

10/19/2015