POLICY:

Checking the variability of EPA's math leads some to question its Clean Power Plan

Under the Clean Power Plan (CPP) -- U.S. EPA's ambitious proposal to curb greenhouse gas emissions from existing power plants -- states are asked to meet widely divergent targets. Some, like North Dakota and Kentucky, would have to cut carbon intensity by less than 20 percent; others would have to hit reduction targets of more than 40 percent. Washington, already ahead of most states in its transition from fossil fuels, would have to lower its power-to-pollution ratio by more than 70 percent.

These differences, according to EPA, reflect the varying circumstances of the states themselves. Each state brings with it a unique blend of regulatory policy, geographic circumstances and energy use, and EPA sought to account for each of these factors in crafting its targets.

"[W]hile the expectations for what the [U.S. power] sector can do are based on a national assessment of what is achievable, the outcome -- or goal -- for each state is unique," wrote EPA press secretary Liz Purchia in an email. The differing outcomes are equitable because they were reached through a consistent national formula, she wrote.

Given the number of factors at play in determining each state's carbon intensity rate, the formula used by EPA is understandably complex. Over the past month and a half, state agencies have been working their way through it in order to recreate the agency's findings, and while most have found the basic formula to be sound, some are hesitating to endorse the logic behind it.

"We looked at the formulas extensively, and in general, yes, we can recreate [EPA's] findings," said Trevor Baggiore, deputy director of air quality at the Arizona Department of Environmental Quality (ADEQ). "We at least know the approach they took. But whether or not the math is sound, it doesn't necessarily mean we're comfortable with the assumptions behind it."

Going behind the numbers

Among the issues Baggiore said ADEQ will raise during the ongoing comment period is the formula's handling of natural gas.

While states are free to chart their own path toward their assigned targets, EPA lays out a series of strategies, or building blocks, through which reductions can be achieved and suggests how far a state may want to go in each area. Fuel switching from coal to natural gas -- potentially by ramping up underutilized gas plants -- falls within the second building block.

Under EPA's formula, existing natural gas plants are expected to run at 70 percent of capacity, potentially displacing coal or petroleum. But that's not necessarily practical for a place like Arizona, said Baggiore, which tends to need peak power standing by.

"Arizona has a lot of natural gas capacity because temperatures tend to spike during the summer and at certain hours of the day," he said. "EPA appears to have gone with annual capacity information" -- which produces a more uniform curve -- "and they're assuming that we could get completely off coal by 2020. But that doesn't work out during the summer months."

In an analysis of EPA's calculations, analysts at the Brookings Institution came to another conclusion regarding natural gas: The formula appears to give preference to under-construction natural gas relative to existing generating capacity. Under-construction natural gas plants are only expected to run at 15 percent capacity, according to EPA's calculations.

"It's my sense that if one state has done a lot to develop its gas infrastructure by 2012, it's faced with a significant obligation under building block two," said Philip Wallach, a fellow in the Governance Studies Program at Brookings. "Another state that hasn't done much gets less of an obligation under block two. But if you're a state like North Dakota and you've got significant natural gas potential you haven't tapped yet, you might have an easy time meeting your obligations."

Locked into the politics of today

A similar discrepancy exists in the formula's handling of nuclear power, he said, in that the formula assumes all states will keep their current fleet online. States with nuclear energy receive credit in the CPP's third building block, along with renewable energy. Any state that retires a reactor before 2030 will have to find another carbon-free source of electricity to replace it, however, or be on the hook for extra emissions.

When it comes to renewables, states are asked to achieve goals similar to those of other states in their region. Here the disparities are glaring: States in the Northeast are expected to achieve a regionwide target of 25 percent renewables by 2030, according to Wallach's analysis. States in the Southeast, by contrast, are expected to hit a 10 percent target.

Because the Northeast is relatively far along in its adoption of renewables compared to its counterpart to the south, renewables would have to grow at similar rates in both regions to achieve their respective targets. And unlike the Southeast, most states in the Northeast have renewable portfolio standards and other policies in place already mandating that similar levels of renewable energy be reached.

But that assumption by EPA -- that states with existing climate policies will be locked into their ambitious commitments, while states that have done less are asked for more modest gains -- could become an area of conflict in the future, said Wallach.

"It seems problematic as a matter of democratic practice," Wallach said. "Maybe [progressive] voters wanted to set ambitious renewable goals when they were in power in 2012, but there's always a chance that the voting public will change its mind by 2020."

Wallach acknowledged that, given current deadlock in Washington, D.C., EPA is making do with what it has -- in this case, a complex bureaucratic formula. "I think they're doing what they can from a tough position," he said. "But at the same time, these equity issues are really glaring, and that's going to make it tough for these rules to win democratic legitimacy."

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