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Powerful Living Understanding EPA’s Clean Power Plan


Could the rule impact Oklahoma’s electric cooperative member-owners? By Anna Politano


O


n Oct. 23, 2015, the U.S. Environ- mental Protection Agency published the Clean Power Plan (CPP) rule in the Federal Register, a publication that


) emissions from U.S. power plants 32 percent below 2005 levels by year 2030— comes with much controversy. While environ- mental groups and 13 states support the rule, 27 states and various industry and utility groups are challenging its legality at the U.S. Court of Appeals—D.C. Circuit. Oklahoma is among the states challenging the rule in court. The rule re- quires that each state make CO2


issues proposed and fi nal regulations from feder- al agencies. The 1,560-page rule (plus additional accompanying technical documents) is a result of President Obama’s strategy to combat climate change. The rule—which aims to reduce carbon dioxide (CO2


emission cuts


based on levels determined by EPA. The publica- tion of the rule opens a 60-day comment period and a potentially lengthy litigation process. The parties behind the lawsuit claim EPA


overreaches its authority under the Clean Air Act (the law used as the foundation for the CPP) by requiring states to make decisions that are likely to bring signifi cant change to local economies, ultimately impacting consumers’ bottom line. Oklahoma Attorney General Scott Pruitt is in strong opposition to the rule; he fi led a legal challenge soon after the rule was published in the Federal Register. “The EPA has no authority under the Clean


Air Act to achieve what it proposes in the rule. It’s an attempt by the administration to transfer decision-making on the fuels used to generate power from state policy makers to bureaucrats at the EPA,” Pruitt says. “The results will be fi nan- cially harmful for states, and consumers ulti- mately will pay the price through much higher utility rates and a less-reliable power supply.”


CPP Basics


States are expected to submit fi nal carbon-cut- ting plans by Sept. 6, 2016. States that do not have a fi nal plan by then may qualify to apply for a two-year extension period if the state shows signifi cant steps have been taken to formulate a State Implementation Plan or SIP. States that fail to submit a fi nal plan, fail to fi le for and receive


6


The charts show the most recent fi gures for the fuels used to generate electricity in the U.S.,


compared with what EPA projects will be the mix under its Clean Power Plan. The plan calls for a 32 percent reduction in carbon dioxide emissions from all power plants by 2030.


Source: Environmental Protection Agency EPA’s new plan would reduce


coal and increase renewables to generate electricity


tion goals by dividing up the states into three regions: the Eastern Interconnection, Western Interconnection and the Electric Reliability Council of Texas. Oklahoma falls in the Eastern Interconnection region. EPA suggest- ed three options—also known as ‘building blocks’—for states to consider while developing SIPs. The three building blocks are: 1) operate coal-fi red plants more effi ciently, 2) run com- bined-cycle gas plants more often while de- creasing coal-fi red generation, 3) and add more zero-carbon generation from renewable sourc- es such as wind, solar, hydro, geothermal and biofuels. EPA calls the building blocks the “best system of emissions reduction” or BSER.


from EPA a two-year extension or that submit a non-compliant plan will be subject to a Federal Implementation Plan or FIP. Details related to a Federal Implementation Plan are still unspecifi ed. For utility leaders, FIP is the least desirable option since a state would be forced to comply with implementation guide- lines developed by federal regulators. States that opt to develop a SIP have two options: a rate-based plan and a mass-rate plan for com- pliance. A rate-based plan requires generation units to adhere to an average amount of car- bon per unit of power produced. A mass-based plan could cap the total tons of carbon the power sector emits each year. EPA estimates that mass-based goals might be more cost-ef- fective to comply as well as better facilitate cap-and-trade programs as a means of compliance. EPA determined state CO2


emission reduc-


Oklahoma’s Position Under the fi nal rule, Oklahoma is expected to reduce its greenhouse gas emissions 31.8 percent below 2005 levels by 2030 or a reduc- tion of 497 pounds of CO2


per megawatt-hour.


According to the Energy Information Administration, Oklahoma has seen a steady movement from coal-fi red generation to gas- fi red generation in the last 10 years. Wind gen- eration has also seen growth in Oklahoma, accounting for 17 percent of the state’s elec- tricity generation in 2014. However, any of


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