Very soon, President Obama and EPA Administrator Gina McCarthy are expected to announce final regulations for reducing greenhouse gas emissions from the electric power sector, otherwise known as the Clean Power Plan. The reaction from those opposed to the plan is predictable.
There will be talk of cost, hardship, and threat to reliable electric power service. Legal challenges will be filed. Some states will “just say no,” daring federal authorities to dictate compliance plans for them.
{mosads}The reality, however, is much less dramatic. Many states are already on track to meet the targets set forth in the EPA proposal. For others, the Clean Power Plan will mostly push them to make their electric power systems better.
Advanced Energy Economy, a national association of businesses that are making the energy we use secure, clean, and affordable, views the Clean Power Plan as an opportunity to modernize the U.S. electric power system for the 21st century. Far from crippling our energy infrastructure, the Clean Power Plan will help drive needed investment in our electric power system. The result will be a more dynamic, resilient, customer-focused energy system.
Developing state-by-state compliance plans will take work, but once the details are sorted out, meeting EPA’s emission reduction targets will not be difficult. Here’s why.
First, the electric power system is already changing in ways that are consistent with EPA’s requirements. Over the past 10 years, generation has been shifting from coal to natural gas, largely based on price. Renewable energy development is accelerating in response to state policies, falling costs, and consumer demand. In states across the country, energy efficiency programs and demand management measures are reducing consumption and blunting costly spikes in demand while saving money for residents and businesses. The Clean Power Plan won’t require anything new, just more of what we’re doing already.
Second, precisely because it isn’t requiring anything new, the Clean Power Plan poses no threat to the reliability of the electric power system. The Advanced Energy Economy Institute, our nonprofit educational affiliate, issued a series of studies over the past six months, several of them involving leading consultants to the utility industry, examining issues identified by the North American Electric Reliability Corp. and found there to be little cause for concern. These reports demonstrated that utilities and grid operators in some areas of the country, such as Texas and Colorado, are already integrating levels of variable renewable energy as high as contemplated by the EPA plan with no impact on reliability; that renewable energy and energy efficiency are cost-competitive resources that can be readily used to reduce emissions, often saving money at the same time; and that the country’s pipeline infrastructure, already being expanded to accommodate additional natural gas use, can support the levels of demand anticipated under the Clean Power Plan.
Third, bipartisan efforts are under way to identify constructive ways to meet EPA’s goals at the state level. One of these is the Western States Clean Power Plan Initiative, which has convened regulators and utilities from 13 states, from North Dakota to Arizona, to examine key technical and policy issues vital to the West, preparing them for the state planning process. The National Governors Association has launched a “policy academy” to help states develop compliance strategies, with Michigan, Missouri, Pennsylvania, and Utah selected to take part. Many states, including some that are suing EPA over the plan, have quietly started stakeholder processes to gather input about ways they can meet the EPA targets – and improve their power systems.
Finally, the Clean Power Plan is particularly conducive to market-based strategies that have accelerated compliance and reduced costs in past regulations, such as those used by EPA to control acid rain. State regulators, utilities, transmission and distribution cooperatives, and merchant power producers participating in the Midwestern Power Sector Collaborative have called on EPA to “provide or approve the use of credit tracking systems for states that wish to implement trading programs and accept reductions or credits from other states as valid compliance currency. EPA already has such systems in place for other pollutants.”
EPA’s Clean Power Plan will soon be final and states can get to work on their compliance plans – and why not? The technology is here, the industry is here, and the policy mechanisms are here. In terms of cost, practicality, and reliability, there is nothing to fear. It’s time to put the drama behind us – and get on with the job of modernizing the U.S. electric power system.
Richard is CEO of Advanced Energy Economy, a national business association.