Tuesday, May 26, 2015

EPA’s Clean Power Plan

“What do you think we should do about climate change?”

If you want to break up a fun cocktail party or interrupt a pleasant family get-together, ask that question. Everyone has an opinion on this topic. I bet if we surveyed the readers of Colorado Country Life, we would be hard pressed to find a consensus on the right answer. I suspect the responses would fall generally into three categories:

“We don’t need to do anything. The climate has natural cycle and emissions of carbon dioxide from power plants and automobiles don’t cause climate change.”

“Climate change is an imminent crisis and we need to quickly and dramatically reduce our use of fossil fuels to avoid an environmental and public health catastrophe.”

“Even if climate change is caused by human activity, we should not wreck the U.S. economy by imposing costly carbon dioxide reduction rules since the developing world will continue to use fossil fuels.”

Regardless of where you stand on this issue, the U.S. Environmental Protection Agency proposed a set of regulations called the Clean Power Plan that would require a 30 percent reduction of carbon dioxide emissions in the United States by the year 2030. The Clean Power Plan establishes specific levels of carbon dioxide reductions in individual states based on the EPA’s analysis of each state’s existing power generation portfolio and access to alternative sources of energy. For Colorado, the EPA has set a carbon reduction goal of 35 percent by the year 2030.
The EPA proposal sets forth four “building blocks,” or strategies, for states to use to meet this target: 1) increased power plant efficiency; 2) switching from coal-fired generation to natural gas; 3) increasing the use of more renewable resources, such as wind, solar and biomass; and 4) encouraging more energy efficiency by en-use consumers.
The Clean Power Plan requires each state (except Vermont) to submit plans for achieving the required carbon dioxide emission reductions within one year of the issuance of the final rules. Even though it is a certainty that the Clean Power Plan will be challenged in court (former Harvard law professor Laurence Tribe says the EPA has overstepped its legal authority), states still face the daunting task of figuring out how to significantly reduce carbon dioxide emissions in the meantime.
There are many questions about how states are supposed to regulate carbon dioxide emissions under the Clean Power Plan. One key question is: what state agency should be in charge of this process? Traditionally the Colorado Department of Public Health and Environment develops state implementation plans to regulate power plant emissions like sulfur dioxide and nitrogen oxide. The Clean Power Plan however, has more far reaching affects on power supply. Further, it would seem logical that the agency that is tasked with keeping electricity reliable and affordable in Colorado, the Colorado Public Utilities Commission, should also have an important role.
To that end, the Colorado General Assembly is considering a bill that would provide a framework for development of a state plan and submission of the plan to the EPA. Senate Bill 15-258 gives authority to CDPHE to develop a state plan for carbon dioxide reduction, but it also requires that the plan be approved by the PUC and the state legislature. We at CREA support SB 15-258 because we believe it is appropriate for the PUC, the agency that has the best understanding of Colorado’s electric grid, to weigh in on a plan that will impact the reliability and affordability of electricity in Colorado.
Some suggest that SB 15-258 is intended to slow down or interfere with the development of a state plan for carbon dioxide reductions, but that is not the objective of the bill. The objective is to create an open and transparent process and to involve the appropriate experts, as well as our elected representatives. We believe that a thorough process is necessary and appropriate given the potentially costly requirements of the Clean Power Plan.
As I write this column, SB 12-258 passed through its first Senate committee hearing with bipartisan support, and is awaiting action by the full Senate. By the time you read this, it is likely the outcome of the bill will have been decided; however, even if the bill does not survive the legislative process this year, it will have sparked an important discussion on how best to regulate carbon dioxide under the Clean Power Plan in Colorado.
 

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