State to seek help with plan to meet EPA carbon rule
A plan to limit greenhouse gas emissions from power plants would require a delicate balancing act by Pennsylvania, a state that has a lot at stake because coal, gas and nuclear are key components of its economy.
The state has 13 months to submit a plan to the Environmental Protection Agency — or seek an extension — for how it will reduce carbon emissions by about 34 percent by 2030. Leaders will be looking for a lot of help.
“Before we write a plan, we want to hear from people what should go into it,” said Gov. Tom Wolf's policy director John Hanger, describing a round of public comment and outreach that will include coordination with regional grid operator PJM Interconnection and possibly working with other states.
The pressure to get it right is immense in a state that exports a third of the electricity it generates, hosts nuclear power plant builder Westinghouse and ranks among the top producers of coal and natural gas, the backbone of generation that President Obama seeks to reduce with the so-called Clean Power Plan. The administration released the final version of the plan 10 days ago.
Wolf, a Democrat, has a little more than year to choose one of the paths outlined by the EPA for lowering emissions blamed for global warming, coordinate the plan with the companies that operate the electric grid and power plants, and get approval from a legislature controlled by Republicans, who favor less government regulation.
Advocates such as the National Resources Defense Council say it is an opportunity to add more renewable sources of energy and to increase energy efficiency programs to reduce demand.
Opponents, some of whom have promised to kill the plan through lawsuits or legislation, say that will balloon customers' bills, make the grid less reliable and stifle manufacturing.
“The governor's office and legislature should do everything in their power to keep costs down for consumers and businesses. If they don't, shame on them,” said Kevin Sunday, manager of government affairs for the Pennsylvania Chamber of Business and Industry.
Industries concerned about higher costs and less reliability of service have said they oppose the plan.
Role for natural gas
The mix of power generation sources in Pennsylvania and efforts that began years ago to mandate the use of alternative fuels will ease the necessary changes, observers said.
An analysis by SNL Financial of steps that states must take to meet the federal carbon limits put Pennsylvania near the middle: in a better position than West Virginia and Ohio, but with a tougher road ahead than New York and New Jersey.
Reliance on coal-fired plants will fall because they produce the most carbon emissions. But Department of Environmental Protection Secretary John Quigley said coal plant operators have said they could meet the plan's initial goal by cutting operating hours at those plants instead of full closures.
The state vowed to preserve as much coal in the generation mix as possible. That would help a coal industry reeling from low prices and tougher environmental regulations that are forcing power producers to shift to natural gas plants, though officials don't want to impede the growth of the shale gas industry.
Some analysts initially said the rule's final version reduced how much states could use natural gas in their plans, but a closer look shows a larger role for gas as coal plants come offline. The new plan expects gas to account for a third of nationwide generation, up from about 25 percent now.
“That could be a lucrative option for states like Pennsylvania,” especially given its huge production from shale, said Erica Bowman, chief economist with America's Natural Gas Alliance.
How nuclear power fits in remains unclear. The final rule allows states to count toward carbon reductions any projects at nuclear plants that increase their generating capacity — so-called uprates — but does not give credit for license renewals at plants that might otherwise close.
“We are disappointed ... that the ‘best system of emission reduction' in the final rule does not incorporate the carbon-abatement value of existing nuclear power plants,” said the Washington-based Nuclear Energy Institute.
Five nuclear plants generate about a third of Pennsylvania's electricity. If other states build nuclear plants to cut emissions, Cranberry-based Westinghouse could potentially benefit. It is involved in building two plants in Georgia and South Carolina.
Links with other states
Pennsylvania mandates that electrical suppliers get 18 percent of their power from alternative sources by 2021. Not all of those are renewables.
To make sure any move to add more renewables does not threaten grid reliability, Hanger said, the state would consult with PJM.
“They have long experience with integrating all kinds of different power technologies,” he said, noting the regional grid operator is headquartered in Montgomery County.
Hanger said Pennsylvania would consider coordinating with neighboring states on a regional effort to reduce carbon emissions, something that was encouraged in the final version of the Clean Power Plan.
“Our preliminary analysis is there are some advantages to that. There's always the problem of coordination, though,” he said.
Working with a state such as West Virginia might be unlikely, given its opposition to the EPA rule and the larger reductions it must make. Cooperating with others might provide a benefit, according to Jackson Morris, director of Eastern energy at the National Resources Defense Council.
“Linking up with other states could reduce compliance costs,” he said.
David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or email@example.com.