Utilities respond to Supreme Court’s stay on ‘clean power’

Before the Feb. 13 death of U.S. Supreme Court Justice Antonin Scalia, the nation’s high court put the brakes on a far-reaching set of Environmental Protection Agency regulations developed by the Obama administration and U.S. Environmental Protection Agency to address climate change.

Dubbed the Clean Power Plan, the federal rules aim to guide local utility providers toward renewable energy and away from coal-focused electricity generation.

The 5-4 decision effectively reverses a Jan. 21 decision of the U.S. Court of Appeals for the District of Columbia, which denied a stay sought by 27 states, including Missouri, and industry groups that challenged the plan’s legality. The hold will remain in effect until the circuit court resolves the legal challenges and either the Supreme Court decides not to review the D.C. court’s decision or the Supreme Court issues its own opinion, according to information from the Missouri Department of Natural Resources. The DNR was charged with developing a statewide plan of action to meet the federal regulations.

The federal plan, which was scheduled to be fully in place by 2030, calls for carbon pollution from the power sector to come in 32 percent below 2005 levels.

Fossil fuel-fired power plants are by far the largest source of U.S. carbon dioxide emissions, according to the EPA, accounting for 31 percent of the nation’s greenhouse gases. Implementation of the plan was estimated to prevent 3,600 premature deaths, 1,700 heart attacks and 90,000 asthma attacks a year.

But by any measure, the Clean Power Plan was costly. The EPA projected implementation to cost $8.4 billion.

Steve Stodden, associate general manager of electric supply for City Utilities of Springfield, said the move doesn’t impact CU in the short term.

In October, CU moved to stop burning coal for power generation at its James River Power Station to meet the EPA’s new Coal Combustion Residuals Regulations – a separate set of rules from the Clean Power Plan. The power station at Springfield Lake has five generators – ranging from 45 to 58 years in service – now generating power from natural gas. The age of the facility makes it cost prohibitive to upgrade for coal-power generation, officials say.

The relatively new John Twitty Energy Center in southwest Springfield, however, will continue use of its two coal-burning generators. At JTEC, officials say any efficiency improvements already have been completed.

“It doesn’t impact the decision at James River at all. That was really driven by other issues,” he said, noting CU added wind purchasing apart from the Clean Power Plan.

At CU, wind energy is roughly equivalent in cost to coal generation. Solar power, on the other hand, costs about three times as much.

“I assume some other utilities might have more pressing decisions to make because we’ve crossed over that bridge and are moving forward now,” he said.

The Missouri Chamber of Commerce and Industry has lobbied to stop the Clean Power Plan.

“We’ve been very troubled about the potential costs,” said Tracy King, the state chamber’s vice president of governmental affairs. “We wrote a letter to [Attorney General] Chris Koster asking him to join the many states that filed suit.

“We also are filing an amicus brief along with numerous other local chambers to stop the plan ourselves. We think we’re going to prevail.”

She said individual utility providers should decide how best to serve customers – not the government.

“Safety, reliability and low cost of power are things states should look at when setting energy policy, and I think all of those come into question with the Clean Power Plan,” King said, adding the federal mandates also threatened the state’s competitive advantage in low-cost energy.

In a Feb. 10 email to CU Environmental Affairs Director Daniel Hedrick, the state DNR official said its air pollution control director would evaluate the ruling and continue to talk with stakeholders and interested parties.

“I think the big question we all had was whether Missouri would stay active to meet the September 2016 deadline. Now that there’s no deadline, I presume they will slow up in the process of putting together a state plan until the courts have made their decision,” Hedrick said.

Not everyone is pleased with the decision.

Kay Mills is a local organizer with Mom’s Clean Air Force, a special project of nonprofit Environmental Defense Fund involving over 600,000 parents advocating for children’s rights to breath clean air.

“We are disappointed in the decision. But it does not overturn the Clean Power Plan,” she said. “We think it is just a temporary pause.”

Barry Hart, CEO of the Association of Missouri Electric Cooperatives, said the Supreme Court decision benefits his 47 member utilities and their 1.5 million customers. With many co-ops already improving air quality and increasing the use of renewables, Hart said the EPA was overreaching.

“The proposed rule would have only required Missouri to reduce carbon emissions by 21 percent, but the key part of it was that any renewable-energy investments we had made we could have used those as a credit for our carbon reductions,” he said. “In the final rule, they aggressively increased carbon reduction (to) 37 percent [in Missouri], and they didn’t allow us to use our renewable energy investments as credits.”