CLIMATE

EPA's McCabe begins carbon rule roadshow at home in Ind.

INDIANAPOLIS -- Forty-eight hours after proposing the most ambitious step yet to combat climate change, U.S. EPA opened its roadshow to help explain its power plant rule to dozens of state utility regulators.

In a speech yesterday morning to the Mid-America Regulatory Conference here, EPA's acting air chief Janet McCabe largely repeated the agency's message in telephone briefings Monday -- that it will achieve the Obama administration's goal of slashing greenhouse gas emissions while providing states the flexibility in approach and timing that they had sought.

McCabe also continued to underscore related environmental benefits that will come from reducing energy use and altering the mix of fuels used to produce power.

"When you reduce carbon from the power sector, there will be some very significant co-benefits that come along with that," she said, referring to estimated reductions in emissions of other pollutants. "These will bring immediate local and regional health benefits to everyone in the country."

For McCabe, acting assistant administrator for EPA's Office of Air and Radiation, the appearance at the conference wasn't so much a road trip as a homecoming.

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McCabe lives in Indianapolis. Prior to going to work for the federal government, she led Improving Kids Environment Inc., a children's environmental health advocacy group. Before that, she spent a dozen years working for the Indiana Department of Environmental Management's Office of Air Quality and helped the state implement several strategies under the Clean Air Act -- much like the plans that states will have to develop to meet the carbon rule.

Those who worked with McCabe in that role in Indiana described her as an effective and pragmatic regulator who was accessible to the public even in the face of pressure from industry.

"I think she was one of the best, if not the best assistant administrators that IDEM has ever had," said Grant Smith, who spent 30 years at Citizens Action Coalition, an environmental and consumer advocacy group in Indiana.

"It's always good for people in her position to be responsive to the public and that's difficult in the political climate in Indiana."

McCabe, in fact, said she drew on her experience as a state environmental regulator in helping craft the proposed carbon rule.

In particular, the experience led her to push for giving states additional time -- an extra year for states developing plans on their own and two years for multistate groups -- to finalize implementation strategies.

"I was one of the loudest voices on this because I used to develop these plans," she said.

EPA's own 'goblet of fire'

McCabe spent much of her hourlong presentation walking the 200 or so people in the audience through how EPA developed the rule, a 647-page document that generated tons of speculation and anticipation -- so much that she jokingly compared the buildup around the release of the rule to a Harry Potter book.

In another aside, she quipped about a press report that China, on the heels of EPA's proposal, was planning to announce a plan to cap carbon emissions. That report turned out to be incorrect.

"We were very excited until we found out that was a mistake," she said, adding, "I'm not sure what that particular Chinese academic is doing today."

Under the rule, which is expected to be finalized in a year, EPA sets the goal posts -- in this case a 30 percent reduction in carbon dioxide from 2005 levels by 2030. But states are given flexibility to figure out how to achieve them (Greenwire, June 2).

She emphasized that the rule relies on four known and proven strategies for reducing power sector carbon emissions -- improving efficiency of existing power plants; making better use of lower-emitting power sources, such as existing nuclear or natural gas plants; adding renewable energy supplies; and consumer energy efficiency.

What works best for one state will be different from the approach taken by others, either individually or as a group.

And the nature of greenhouse gases, unlike pollutants with greater local impacts, makes it possible for any group of states to pair up on a strategy to reduce emissions.

"You could have Florida and Washington state join together," she said.

While EPA isn't advocating any particular approach, McCabe said energy efficiency should prove a valuable tool for many states and is a strategy that will simultaneously create local jobs and help reduce electric bills.

In fact, in cost modeling, the EPA analysis shows energy efficiency will help lower consumer bills by 8 percent by 2030, even if electric rates rise.

That line in particular appeared directed at the more than three dozen state utility commissioners from the central United States. Many of them represent states like Missouri and Indiana that remain heavily reliant on coal as a fuel source and are significant emitters of greenhouse gases.

Fuel mix concerns

As McCabe's presentation gave way to a panel discussion on the country's mix of electric generation, utility commissioners, energy executives and grid operators voiced strong concern for maintaining diversity in the nation's electric generation mix and an "all-of-the-above" strategy for meeting demand.

Greg White, a utility commissioner in Michigan, said he's concerned about the possibility of seeing power plants closed prematurely and becoming overreliant on a particular fuel for generation -- natural gas.

"We've been there and done that before," he said.

John Bear, chief executive of the Midcontinent Independent System Operator, the grid operator whose footprint stretches from the Gulf Coast to Canada, said compliance with EPA's carbon rule will mean coal-fired generating capacity in its footprint will have to be reduced by half, from about 80 percent to 40 percent.

"That is going to be a significant change for us," he said.

Scott Peterson of the Nuclear Energy Institute said the trade group was pleased that EPA's rule recognized the value of the nation's existing nuclear fleet in helping reduce carbon emissions (Greenwire, June 2).

New nuclear plants will also play a role, especially in the Southeast, an area where five new reactors are being developed. The region is the most promising market for new nuclear plants, too, because of state regulations, legislation allowing cost recovery for construction work in progress and growing electricity demand.

Susan Reilly, chief executive of Broomfield, Colo.-based RES Americas, a wind developer, said wind energy will continue to be a bigger piece of the generation pie as costs, down 43 percent over the last five years, continue to drop.

"Wind is now about 4 percent of the U.S. generation mix, and I think it can do a lot more," she said.

Reilly said a Department of Energy study about to go out for peer review will demonstrate that the country can get 20 percent of its generation from wind by 2030 with only the slightest effects on retail electricity prices in the short term and a savings for consumers in the long run.

That will be valuable, she said, in helping the nation meet its 30 percent target for carbon emissions from existing power plants.

"After energy efficacy, onshore wind is a very effective way to reduce carbon emissions at scale and do it fast," she said.

Craig Gordon, a vice president for Chicago-based Invenergy LLC, an independent power producer, said gas and wind should play an increasingly larger role. Natural gas, in particular, is well-positioned to serve additional load in the footprint of the PJM Interconnection.

"We see the PJM area as sitting in a very sweet place," he said, because of proximity to gas production in the Marcellus Shale.

On the flip side, he said, "we don't look at coal as viable at all."

Twitter: @jefftomich | Email: jtomich@eenews.net

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