Utilities say EPA power plant rule isn’t ready

By Peter Behr, Zach Bright | 08/09/2023 06:42 AM EDT

The agency has been accepting a wide range of comments on its proposal to cut greenhouse gas emissions in the electricity sector.

Steam rises from the Miller coal power plant.

Steam rises from a power plant in Adamsville, Ala. Andrew Caballero-Reynolds/AFP/Getty Images

U.S. electric utilities told EPA on Tuesday that a proposed rule to shrink power plant carbon emissions shouldn’t be implemented yet because key emerging technologies aren’t ready, offering the latest pushback to the Biden administration’s plan.

The Edison Electric Institute, which represents investor-owned utilities, pointed to technical shortcomings with the potential use of clean hydrogen and carbon capture to slash greenhouse gases in the power sector.

EPA’s proposed timetable, EEI said, could leave grid operators short of fossil-fuel-based generation that may be essential to prevent power outages in emergency situations, particularly during extreme weather when wind and solar power supplies can be low. The electric utility trade group has touted efforts by its members to lower carbon emissions in recent years — while warning of a need to move at a pace that preserves reliability.


“EPA should not finalize” standards that are based on carbon capture or blending zero carbon hydrogen with natural gas in turbine generators, EEI said in its Tuesday commentsto the agency. “If EPA moves forward with the standards as proposed … the Agency should provide electric companies and states as much compliance flexibility as possible to address achievability concerns,” it added.

EEI’s views on the rule were highly anticipated, as it is the power sector’s largest lobby group and has worked closely with the Biden administration on energy issues.

The group’s warning shows the challenge facing the Biden administration as it pushes to decarbonize the U.S. grid by 2035. Without full support from the country’s largest utilities — which determine much of the trajectory of the electricity mix — the Biden clean energy goals are unlikely to be reached, even with the incentives in last year’s Inflation Reduction Act, according to analysts’ computer modeling. EEI’s comments reflect utilities’ position that the infrastructure and systems to roll out widespread carbon capture and hydrogen blending won’t be ready on EPA’s timetable and would impose high costs on utility customers.

The EPA proposal — not due to be made final until next year — would set deadlines for carbon emissions reduction for coal power plants and large gas-fired units, adding new federal requirements for what is now a mix of clean energy targets in Democrat-led states and varying goals for carbon reduction by 50 of the nation’s large utilities. Comments on the proposal were due Tuesday.

Criticism of the EPA plan would feed into expected challenges of the final regulation that could go to the U.S. Supreme Court, whose conservative majority has strictly limited EPA’s options for reducing greenhouse gas emissions.

The comments Tuesday reveal a sharply fractured response from within the grid industry and climate action community that split into three main camps on the rule: stop, pause and go faster.

West Virginia Attorney General Patrick Morrisey (R), speaking for his state and attorneys general in 20 other states, filed opposition to the EPA proposal Tuesday, contending that “EPA has no more authority to mandate this result indirectly than it did when it tried to do so directly,” referring to EPA’s earlier power plant regulation that the Supreme Court rejected last year.

Stiff opposition also came Tuesday from the National Rural Electric Cooperative Association, whose comments contended the agency’s plan relies on “inadequately demonstrated technologies with unworkable timelines that will be impossible to achieve.”

The electric cooperative group said EPA lacks the legal authority to require operators of coal-fired power plants to install what it called costly, unverified processes for capturing and removing nearly all carbon dioxide emissions from plants, or close the plants by 2040.

The EPA plan creates “direct threats to electric grid reliability that EPA fails to appropriately assess and inaccurately models. Accordingly, EPA should withdraw the Proposed Rules in their entirety,” the cooperative group said.

‘A step forward’

From the opposite direction, activists organized by the Climate Action Campaign announced the hand-delivery of more than 1 million public comments to EPA on Tuesday urging the agency to adopt the strongest possible limits on climate pollution from electricity generation facilities.

“EPA’s current proposal is a step forward in cutting climate pollution from the power sector … [but] the proposal does not go far enough,” the climate organizations said. Their statement challenged President Joe Biden’s administration to live up to its pledge to achieve a carbon-free power grid by 2035 — a target that computer modelers warn can’t be reached if present power industry trends continue.

“The record heatwaves, fires, storms, and floods across the globe this year demonstrate the need for strong standards to cut carbon pollution from power plants,” the nation’s second-largest source of those emissions, the Natural Resources Defense Council, Clean Air Task Force and Nature Conservancy said in a joint statement accompanying their filing with EPA.

“While the fundamental structure of the proposal is strong, key improvements can and should be made,” said David Doniger, a senior strategic director at NRDC.

“Fifty years of history shows that the electric power industry’s nitpicking of EPA’s plan should be taken with a pinch of salt,” Doniger said in a statement. “The electric power industry has a long track record of objecting to new pollution control requirements as they are proposed, but then outperforming those requirements once they are set.”

While Biden faces pressure from the left, the EPA plan also is opposed by congressional Republican leadership.

Last month, Sens. John Barrasso (R-Wyo.) and Shelley Moore Capito (R-W.Va.) called on the Federal Energy Regulatory Commission to determine whether the EPA restrictions on fossil fuel power plants could threaten electricity supply.

“EPA clearly lacks the expertise to project accurately the impact of its rulemaking on electric reliability,” said Barrasso and Capito, the top Republicans on the Senate Energy and Natural Resources and the Environment and Public Works committees, respectively, in a statement at the time.

FERC has announced it will hold a technical conference on the EPA proposal in November.

‘A lot of time’

The state and utility timetables do not move fast enough to achieve the Biden administration’s objective of reaching a zero-carbon-emissions grid by 2035, even with the clean energy incentives in the Inflation Reduction Act, according to analysis by the Rhodium Group consultants and other analysts.

The North American Electric Reliability Corp., which develops reliability standards for the interstate power grid, has warned that retirements of fossil fuel plants must be scheduled to support the growth of wind and solar power, to assure around-the-clock electricity is always available. That coordination isn’t adequate now, NERC said.

That challenge is certainly manageable, said Mike O’Boyle, senior director for electricity for Energy Innovation, a San Francisco-based energy analysis firm.

“The reality is we have the technology and the engineering knowledge to maintain reliability throughout the transition away from coal fired plants to reliance on renewable energy for the majority of our electricity,” O’Boyle said in an interview Tuesday.

“EPA is giving the utility industry a lot of time to comply,” he added.

There is, however, no one accepted source of expertise on how fast and far the clean energy transition can go while assuring electricity reliability, and the decisionmaking is a patchwork of federal and state regulation, he said.

”There is no single authority tasked with ensuring reliability. As the comments to EPA roll in, you can see different stakeholders have different points of view and level of confidence in maintaining reliability, in part because the management of the grid is so fractured,” he said.

The country’s political divisions put a unified policy solution out of reach, he added.

Southern, Duke, Entergy

While EEI represents major U.S. utilities and has sway with lawmakers and agencies, views of EPA’s rule were not uniform across the power community.

The EPA rule would not be made final until next year.

“I think there’s got to be flexibility that allows everybody to make the transition in an orderly fashion that keeps affordability,” Southern Co. Chief Executive Chris Womack said in an interview last week.

Duke Energy Corp. CEO Lynn Good said during a company earnings call Tuesday that “while we support EPA’s commitment to a cleaner energy future, we believe an orderly transition requires a diverse mix of energy resources and must align with the pace of technology development.”

The country’s largest public power provider, the Tennessee Valley Authority, said in a financial filing last week that the EPA rules “if finalized in their current form, could have a material adverse effect on TVA’s results of operations and financial condition.”

“Proposed [EPA] rules to drastically limit power plant emissions will lead to the closure or reduced operations of critical electric power resources,” the Electric Power Supply Association said in a recent statement on behalf of its competitive power generator members.

Utilities whose comments were available Tuesday based their responses to their particular challenges and opportunities in carbon reduction.

Entergy Corp., the New Orleans-based utility operating in parts of four Gulf Coast states, said its companies remain “committed to their announced plans to cease coal-fired generation operations by the end of 2030.” The EPA plan concerning one set of coal plants “is well-founded and should be finalized,” the company told the agency, referring to plants that will retire before 2032. Entergy did not comment on the other parts of the EPA proposal on coal plants.

While Entergy said it continues to support carbon capture and storage of gas-fired power plant emissions and the blending of zero-carbon hydrogen with natural-gas fuel streams, it said those technologies are not advanced enough to be the basis of EPA regulations.

More development and investment in infrastructure for these technologies is required before they can be considered commercially available, contrary to EPA’s position, Entergy said.

On the other side, Constellation Energy Corp., a Baltimore-based energy company, said it’s offering “strong support” for the proposed EPA standards and “presents a contrary view to major electric producers who have rejected EPA’s efforts to address the industry’s emissions.”

“We feel confident that EPA is on the right path because we have really been on the forefront of developing some of the technologies that will allow existing gas-fired generation to comply with some of these rules,” Constellation CEO Joe Dominguez told an audience Monday.

This story also appears in Climatewire.

Clarification: This story was updated after publication to clarify Entergy Corp.’s comments about EPA’s proposed power plant rule.