Despite Attorney General's Advice, Utilities Move Toward Clean Power

 

 

 

By Sarah Tincher

May 20, 2016 - West Virginia has been leading the charge to knock down federal carbon-cutting regulations, but the state's utility companies are taking steps on their own to embrace changes toward cleaner power generation anyway.

West Virginia Attorney General

 

Patrick Morrisey, while gathering support from more than two dozen states and state agencies, has been working to challenge the U.S. Environmental Protection Agency's Clean Power Plan in federal court since the rule was still in its preliminary stages. The Clean Power Plan aims to reduce pollution from existing coal-fired power plants.

After a federal appeals court denied several requests to block or halt the rule, which was finalized in August 2015, the U.S. Supreme Court decided to put implementation of the regulation on hold in February while the court waits to hear oral arguments on the merits of the case, which is slated for June 2.

In the meantime, Morrisey and his coalition of supporters have asked states and utilities to hold off on complying with the rule.

"We firmly believe our arguments against the EPA's Power Plan will prevail," said

 

Curtis Johnson, a spokesman for Morrisey. "The Supreme Court's recent stay should signal as much and inspire renewed confidence in the coal industry.

"It is our hope that utilities, job creators and state governments will put their pencils down and give time for our litigation to succeed."

Lessons Learned

Morrisey has iterated that suggestion throughout the challenge process. It comes as an effort to avoid a repeat of what happened to the agencies and states, including West Virginia, that previously fought to block the EPA's Mercury and Air Toxics Standards (MATS) for coalfired power plants.

Dozens of states, various industry representatives and utility groups filed suit against the MATS rule in 2012. The U.S. Court of Appeals for the District of Columbia Circuit upheld the rule in April 2014. Then the Supreme Court ruled in June 2015 - months after the mercury rule had already taken effect and 12 coal-fired power plants in the state had already been shuttered as a result - that the EPA failed to take their cost into account when it first decided to regulate the toxic emissions from coal- and oil-fired plants.

But the court allowed the rule to stay in effect, and it was returned to the D.C. Circuit Court of Appeals to decide how the cost-benefit analysis should be conducted.

At the time, Morrisey said the passive course of the proceedings was a prime example of the importance of putting these types of regulations on hold while legal challenges are pending in court.

"The Court's decision underscores the need for courts to stay agency rules that are likely to be struck down," Johnson said in response to the ruling in December. "Despite the Supreme Court having clearly ruled that EPA acted unlawfully, the agency has convinced the lower court to keep an indisputably illegal rule in place based on the perverse argument that the regulated power plants largely have already suffered the costs of compliance.

"Courts should not permit agencies to continue to get away with a 'shoot-first-ask-questionslater' approach to regulation," he added.

Acting Alone

While the electric utility companies can't technically create compliance plans of their own, as it's the states' duty to create a strategy to achieve the C02 emissions reduction targets, many are still working independently to slash emissions and operate more cleanly.

"What we can do in general is we can move toward more renewables and less carbon emitting sources and generation," said

 

Jeri Matheney, spokeswoman for Appalachian Power, a subsidiary of American Electric Power operating in West Virginia.

Echoing a statement previously uttered by executives from AEP and Xcel Energy at the IHS CERAWeek conference in Houston Feb. 25, Matheney said Appalachian Power anticipates the federal government limiting carbon emissions in some way, even if the court does decide to block the Clean Power Plan.

"We certainly do think there will be carbon regulation," she said. "We don't know what shape it will take, but there will be carbon regulation."

Matheney went on to say a lot of these decisions are also based on pricing, which means dropping renewable energy costs and consistently low natural gas prices are enticing longterm options - especially when compared to the coal market's collapsing market.

"Our plans are to integrate more renewables and natural gas," she said. "I think we will continue down this path because, No. 1, the declines in price makes them economical anyway and, No. 2, we think there's going to be some kind of carbon regulation.

"We do believe that we're headed down the right path to serve customers in the most cost-effective and environmentally responsible way," Matheney added.

FirstEnergy, which operates Mon Power and Potomac Edison in West Virginia, also is planning to move forward with cutting carbon emissions, regardless of the court's ruling on the Clean Power Plan, according to spokeswoman Stephanie Walton.

"FirstEnergy has set an aggressive goal of achieving a 90 percent reduction in C02 emissions below 2005 levels by.2045," Walton said. "We set this goal independent of the Clean Power Plan and expect to achieve these reductions whether or not the plan is implemented.

"As a company, we've seen significant reductions already and we are on the path to continually reduce C02 in the coming years," she said. "Through plant retirements and investments in turbine improvements and other plant efficiencies, FirstEnergy has already reduced carbon dioxide emissions 25 percent below 2005 levels."

Walton went on to say the company has retired a total of 27 units at 12 different power plants since 2010.

While several West Virginia lawmakers have opposed the rule, Gov. Earl Ray Tomblin announced in October that the state will create a compliance plan under the regulation. He argued the state is better off trying to come up with its own compliance plan rather than waiting for the EPA to implement its own plan in the state.

State officials have not yet started work on a formal compliance plan, according to Department of Environmental Protection spokeswoman

 

Kelley Gillenwater, but they have been working on a feasibility study, as required by legislation passed last year. The study is due to the West Virginia Legislature by April 20. If the regulation holds up in court, states are required to submit compliance plans to the EPA by September of this year, but states can request a two-year extension of that deadline if necessary.