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Draft rule reduction: 37.8% (492 lbs CO2 / MWh)

Editor's note: The following summary represents state and utility stances after the Supreme Court stayed the Clean Power Plan in February 2016.

The Virginia General Assembly has blocked the Department of Environmental Quality from spending money to work on a proposal to comply with U.S. EPA's Clean Power Plan (ClimateWire, April 21). But Gov. Terry McAuliffe (D) issued Executive Order 57 directing a group to explore carbon reductions outside the federal regulation (ClimateWire, June 29).

DEQ Air Division Director Michael Dowd, who directs the agency's work on the Clean Power Plan, said the spending prohibition wouldn't affect much since the Supreme Court in February stayed implementation of the rule and stakeholders are also awaiting EPA's model carbon-trading rules before they can move forward.

"Obviously, we're going to comply with the law, and we won't be putting pen to paper to draft a plan ... or initiating, obviously, any regulatory actions with respect to the Clean Power Plan," Dowd said. "On the other hand, I'm not sure it affects our work that much since the stay is in effect [and] we're kind of limited in what we can do anyway.

"It's hard to draft a plan anyway because we don't know what the courts are going to do," he added.

A group of 14 electricity industry and consumer stakeholders had been meeting monthly to prepare recommendations to McAuliffe about how the state should meet its Clean Power Plan goals.

"The only thing that really makes sense to us is to continue on the path that we're on, to evaluate the different options," Dowd said soon after the Supreme Court stay in February.

In April, DEQ released a report detailing stakeholder positions on the rule.

Discussions suggest Virginia would write a "trade-ready" plan to allow power generators to pay to take credit for renewable energy or other carbon-cutting measures that can be achieved more cost-effectively by other companies or in other regions (ClimateWire, Dec. 16, 2015).

But interests in the state are split over what kind of carbon-trading plan to pursue.

Virginia's largest utility, Dominion Resources Inc., wants the state to work toward an average rate of power-sector carbon emissions.

In a rate-based system, Dominion believes it could produce credits from its own natural gas plants to account for emissions from its coal facilities. Dominion, or other companies, could also potentially build more new natural gas plants down the line to meet growing power needs or replace retiring nuclear power, explained Lenny Dupuis, Dominion's environmental manager.

Other power companies, including American Electric Power Co. Inc. and owners of various coal plants, think Virginia should cap emissions outright. They worry that a rate-based trading market might be smaller and yield more expensive credits because fewer states are considering writing rate-based plans.

Environmental advocates have been urging the governor to cap emissions from existing and new sources of power (ClimateWire, Jan. 27).

State chapters of the Sierra Club, Interfaith Power & Light and other groups like the Chesapeake Climate Action Network asked McAuliffe in a letter in January to ignore Dominion's preference.

"Dominion Resources has embraced a compliance approach that, if implemented, means the company would increase — not decrease — harmful carbon emissions from its Virginia power plants," the groups said in the letter.

"The company wants Virginia to implement the CPP in a way that would not apply to new fossil fuel power plants in Virginia. This would allow Dominion to continue its massive expansion of gas-fired generation at the expense of investments in renewable energy and energy efficiency," the letter said.

Both Virginia's final and interim carbon goals were softened from the proposed rule.

The state's 2030 goal requires a 32 percent reduction in the carbon emissions rate, versus 38 percent in the draft rule. The goal is 934 pounds of carbon dioxide per megawatt-hour, which EPA describes as the middle of the range for states. By comparison, the proposed 2030 goal was 810 pounds of CO2/MWh.

Last updated on October 19, 2016 at 2:03 PM

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