Climate:

Mass. DEP's Cash says revised carbon plan formula probable in final rule

How should U.S. EPA address stakeholder concerns raised during this week's public and congressional hearings on its Clean Power Plan? During today's OnPoint, David Cash, commissioner at the Massachusetts Department of Environmental Protection, explains why he believes grid reliability, coal plant efficiency and state flexibility concerns will continue to be sticking points for the proposal as the agency accepts comments on the rule. Cash also discusses the likelihood EPA will establish a revised formula for assigning emissions reduction targets to the states.

Transcript

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is David Cash, commissioner at the Massachusetts Department of Environmental Protection. David, it's nice to have you back on the show.

David Cash: It's great to be here, thanks.

Monica Trauzzi: David, you spoke at EPA's D.C. public hearing and testified before a House committee, all on EPA's Clean Power Plan this week, you're right in the middle of the action. What are your impressions on how divided the dialogue is over this proposal?

David Cash: There's no question it's divided, and that was to be expected. A lot of concerns have been raised. And I've got to say from the outset, the concerns that I've heard raised at the hearing today, in the press, each one of those concerns, there's certainly truth to that. And one of the things that I think EPA has done well is try to address each of those concerns, and that's something that we've done in Massachusetts as well.

Monica Trauzzi: So authority is delegated to the states in the Clean Power Plan, but we're hearing from some state regulators already that the flexibility that EPA promised isn't quite there. For example, in Georgia, Georgia public service Commissioner Tim Echols, he spoke at the Atlanta EPA hearing, and he said that Georgia already has a model in place that allows for flexibility and that EPA's rule would undo that. How should the agency be addressing those types of concerns?

David Cash: Of course, I don't know the specifics about Georgia, but ideally, EPA would look at that and look at what the performance is. If Georgia is able to reduce its emissions, if it's able to increase its use to renewable energy, increase energy efficiency, et cetera, then I think it should be fine. Again, I don't know the details, but I think that's the spirit of the rule is to provide that kind of flexibility.

Monica Trauzzi: We've talked a lot about RGGI on the show with you, and you believe that RGGI demonstrates the U.S. can cost-effectively reach its environmental goals. Would a RGGI type model work in the Southeast, for example, where we're starting to hear a lot of concerns about whether those states can comply with EPA standards?

David Cash: If the question is, can a market-based program like RGGI work? I think that it could. Are there many other models that could work in the Southeast? Yes. I think there are. In fact, the Southern Co. and other Southern utilities are already rolling out energy efficiency programs. They're already rolling out solar programs, though not as aggressively as they could. At the hearing today we talked about the Sunshine State, which doesn't have as much solar as it could have. And primarily I think that's because there are barriers still in the way of distributed generation like solar, inadequate net metering rules, that kind of stuff. It's kind of the nitty-gritty, how do you regulate utilities kind of questions. But in terms of a market-based program, yeah, I think there should be no reason why. The advantage of a market-based program is that it allows the cheapest reductions to happen and to count as part of the whole system. So if it's hard to reduce in Georgia or in Florida, but it's easier to reduce in other states, that can count, and it should count.

Monica Trauzzi: The country's chief energy regulators have also raised some issues with the proposal. This week we heard from FERC commissioners about the Clean Power Plan, and they acknowledge that there could potentially be some reliability challenges. How concerning is that element of reliability?

David Cash: Reliability should be a concern. There's no question about it. We have to have a reliable system. And I think that history has shown that you can address the environmental concerns that come from the power sector and get reliability. Let me give two examples. One is the Acid Rain Program from the '90s. The same kind of concerns were raised then -- it's going to be too costly, it'll impact the power grid in hugely negative ways, it'll destroy the economy. None of those happened. The cost of compliance was much lower, a fraction of what even EPA was saying. The various ISOs and state grid operators made it work. And we've seen the same thing in RGGI in the Northeast as well. ISO New England, PJM, New York ISO have all stepped up and created the right kind of dispatch that can be used in this kind of implementation. In fact, some of these programs enhance reliability. Our energy efficiency reduces demand. Our solar programs create energy right when you most need it. That makes a more reliable system, not a less reliable system.

Monica Trauzzi: In testimony before the same House committee you addressed, the former assistant secretary for fossil at the Department of Energy, Charles McConnell, raised issue with the efficiency building blocks. So there are four building blocks to this proposal. He raised issue with the efficiency building block of the proposal saying in order to hit a 6 percent efficiency improvement, you'd essentially be looking at the need to rebuild, restructure power plants entirely. Does the proposal then make it nearly impossible to continue to use coal in the United States?

David Cash: I don't think it does. I don't think it does at all. I think you can envision coal states that have very aggressive energy efficiency programs that are still run on coal and natural gas, and I think that's what Administrator McCarthy was talking about earlier this week at her hearing. What has always confused me is that energy efficiency is such a win-win-win-win. I don't understand why regulators would want to not allow customers to have the opportunity to save on their energy costs. And what you get in the bargain is local jobs, because the people who come in and audit your homes, et cetera, are going to be local jobs. That can't be outsourced.

Monica Trauzzi: And one of the other four building blocks of the proposal focuses in on natural gas. That assumes, though, that a lot of the local debates that we're seeing right now around fracking will go away and that the United States will be able to tap into its full natural gas resources. Do you see that as a potential hurdle?

David Cash: I see solving the fracking problem as a hurdle, yes. I think there's still a lot of science that's out there. There's a lot of uncertainty about the impacts of fracking and the impacts of methane emissions that happen during fracking. And I think that if we move to performance standards where we calculate what the greenhouse gas emissions are, this kind of program should be able to capture those kinds of problems.

Monica Trauzzi: How strong is the possibility that EPA will establish a revised formula when it comes to the final rule, the formula that they use?

David Cash: That's a very good question. My guess it will be substantially revised. I think they're getting a lot of input now. As you noted, I was at a hearing earlier today. There are hearings all this week all over the country. They're getting written comments through October, and a lot of the questions I know are raised are how the formula is set. And my guess is, as has been the case throughout this process, EPA will listen to those comments and revise the formula to make it fit better what the states are looking for.

Monica Trauzzi: All right, this is very interesting. We'll end it there. Thank you for coming on the show.

David Cash: Thank you very much.

Monica Trauzzi: And thanks for watching, we'll see you back here tomorrow.

[End of Audio]

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