The EPA Clean Power Plan
by Mike Sherman
In August 2015, the Environmental Protection Agency (EPA) published the Clean Power Plan as a final regulation under the Clean Air Act. The EPA’s authority to make this regulation was established under two cases argued before the U.S. Supreme Court, Massachusetts v the EPA and American Electric Power v CT. Two New England states, Massachusetts and Connecticut, led the charge.
The aim of the Clean Power Plan is simple. Electric generation now accounts for almost 40 percent of all CO2 emissions, which arise from burning fossil fuels to generate electricity. The plan’s goal is to reduce CO2 emissions arising from electricity generation by an estimated 32 percent below 2005 emissions, which serve as the baseline. Each state has an individual reduction goal, depending on conditions like the existing mix of fuel generation, feasibility, costs, and emission reduction potentials. The EPA has set goals for 2020, 2022, and 2030.
How will these goals be accomplished? States have considerable latitude in planning programs to reach their individual reduction goals, but their plans should include the following:
* Increased emphasis on energy efficiency to reduce the need for electricity. Massachusetts, the no. 1 state for energy efficiency for the past three years, consumes no more electricity in 2015 than it did ten years ago, and the state’s economy is still healthy.
* Reduced fossil fuel generation, particularly coal, which is the worst CO2 and particulate emissions source. Much coal generation is being replaced with natural gas because of its abundance and low cost, but natural gas emits methane, a more serious heat-trapping greenhouse gas. So, gas-fired generation must be restrained as well.
* More generation from renewable energy sources—wind, solar, hydropower, and tidal energy—by homes, businesses, and utilities. Renewable energy generation will be an increasing part of total generation. It will require restructuring the electric generation and distribution system into the “distributed grid.”
* Potentially, more nuclear power generation. The EPA plan allows for nuclear generation, although few plans are on the drawing boards, and the trend is toward retirement of existing nuclear plants.
How likely is any of this to happen? The prospects for reaching the goals of the EPA plan are positive. Many states, including some of the largest coal users, are already reducing their reliance on coal. Michael Bloomberg, the billionaire businessman and philanthropist, writes that many owners of coal-fired generation plants are moving to natural gas because of the public’s desire to reduce the health hazards and climate damage resulting directly from coal burning. According to the Union of Concerned Scientists, nine states, including Massachusetts, are on track to meet 2020 goals; twenty-three states, to meet at least 75 percent of the 2020 goals; and thirty-one states, to meet at least 50 percent of 2020 goals. Some of these states include heavy coal producers like Kentucky and Ohio.
The Clean Power Plan isn’t the only game in town. The EPA has been making rules to clean up existing power plants with emissions controls, with some pushback from the utility industry and the U.S Supreme Court. The EPA has issued tough auto emissions standards that will eventually require 50+ miles per gallon, and the agency is finally approaching regulating emissions from large trucks. Almost under the radar are a variety of appliance and equipment efficiency standards issued by the Department of Energy that have steadily ramped up the baseline efficiency of appliances like water heaters and air conditioners as well as a variety of industrial equipment. You may also remember the “war” on incandescent light bulbs, which should reduce overall lighting energy by approximately 75 percent.
What can we do to maintain momentum? Massachusetts has accomplished a great deal in energy efficiency, and made much progress with solar energy though somewhat less with wind energy. There are legitimate concerns that natural gas availability in the winter months won’t be enough to meet both heating and electric generation needs. Gas for heating is purchased on a “firm” basis, meaning that delivery at a fixed cost is guaranteed by the seller. The market for gas for electric generation is more volatile, accounting for the spikes in electricity prices that affect our electric bills.
Not enough is being done to repair the gas pipeline distribution systems, which are on average very old, not well maintained, and leaky. Fixing these would reduce the amount of gas that needs to be generated, in the same way that repair of water pipelines, together with water conservation, successfully reduced water consumption in Boston, for instance, from 330 million to <200 million gallons per day over the last thirty years.
We should continue to install solar panels on homes and businesses, and support lifting the current state cap on total solar from homes that the utilities are allowed to utilize.
We should be sensitive to equity issues in paying for solar installations: some people argue that owners of solar equipment are being subsidized at the expense of other ratepayers, particularly low-income customers. But that does not mean solar expansion should slow. Solar is becoming less expensive, alternatives like leasing are available, and the solar industry creates good jobs. And solar provides environmental benefits in which we all share.
We should continue to support the energy efficiency work being done through the state’s electric and gas utilities. Massachusetts now avoids using 2.5 percent of the electricity that would be needed without those programs, the highest percentage in the country. Some in the commercial sector would like to scale the efficiency efforts back because those efforts increase rates. But efficiency is still by far the cheapest “electric source,” and much work remains.
We should press to understand the status of the gas distribution system—what it would cost to improve it—and take care that those costs don’t fall primarily on ratepayers rather than utility shareholders.
Do we need more pipeline capacity? There’s much disagreement on this question, with the proponents arguing we would build for future needs, and opponents saying that new pipelines will add new ratepayer costs and that increased efficiency will take care of the problem.
Will all this be enough to slow or stop the pace of climate change? Climate change happens over decades, with long-delayed effects that we are slow to recognize. Even if all the measures directed by the EPA are realized, we will still be a long way from reversing or even slowing the rate of climate change. Much more must be done over a sustained period of time.
Slowing or reversing climate change will take a long time, but that’s no reason to throw up our hands!
- “Obama Didn’t Kill Coal, the Market Did,” Bloomberg View, August 4, 2015.
Mike Sherman is president of Sherman Energy Solutions LLC and has more than 30 years’ experience in a broad range of energy policy and energy efficiency concerns. From 2005 to 2010 he was director of energy efficiency programs for the Massachusetts Department of Energy Resources.