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Coal-reliant Ameren offers support for EPA's Clean Power Plan in exchange for revisions

Coal-heavy electric utility Ameren Corp. is laying out changes U.S. EPA could make to its proposed Clean Power Plan to earn the company's support for the proposed rule.

In a white paper released today, the utility -- which produces 70 percent of its power from coal-fired plants -- doesn't hold back any criticism but is overall conciliatory, asking for revisions that mirror requests from both defenders and opponents of the power plant regulations.

Ameren is the first coal-dependent utility to refine its position on paper and to make a formal move toward developing consensus on the controversial rule.

EPA's rule would reduce power-sector carbon emissions 30 percent below 2005 levels over the next 15 years by asking states to cut their emissions rates by varying amounts.

Ameren wants EPA to replace interim goals that would begin in 2020 with a more flexible glide path and let states extend their final 2030 deadline if a "clear path to meaningful reductions is evident within a reasonable timeframe."

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The utility also wants states to get clearer credit for shutting down coal-fired power plants. As the rule is written, the company is concerned a state could shut down a coal plant and not see a reduction in its emissions rate because both the emissions and the amount of power produced would decline.

The Missouri-based utility says its own plan could meet EPA's carbon emissions goals by 2035 and save $4 billion in costs while avoiding grid reliability problems related to early closures of coal plants.

Ameren is framing the white paper as offering "constructive alternatives" to EPA's plan, calling it "a case study in the benefits of Midwestern pragmatism."

Joe Power, vice president of regulatory affairs for Ameren, said the proposal is meant to highlight major concerns but also move forward negotiations with EPA.

An EPA spokeswoman said in response to a description of the proposal only that the agency is taking all comments into account.

Core disagreements

Holly Bender, deputy director of the Sierra Club's Beyond Coal campaign, said Ameren's position marks a transition for the utility, and it will be interesting to see if others follow suit.

"This is a subtle but noticeable shift from where the company has been," Bender said. "I think that we are seeing a different Ameren than we would have seen five years ago."

Bender, however, disagrees that Missouri needs more time to comply.

"From where we sit, Missouri does not need more time to comply with the Clean Power Plan [and can comply] fairly easily based on things that have already happened or will happen by 2030," Bender said. "I understand Ameren's perspective on its fleet alone, but it's not relevant to whether Missouri can comply with the targets."

Power says Ameren could support the Clean Power Plan if EPA made the company's recommended changes. But Ameren still has major problems with the core of the regulation. The white paper argues that the carbon-reducing measures used to write state goals are based on flawed assumptions, that the rule would cause cost increases and reliability issues, and that EPA doesn't have legal authority to implement the proposal in the first place.

A press release on the white paper implies that making Ameren's changes could help EPA with legal challenges, although Power doubts the revisions would solve what Ameren sees as significant vulnerabilities. "It's certainly not going to call off the Murray lawsuit," he said, referencing an early challenge by coal company Murray Energy Corp., which aims to prevent EPA from finalizing the rule.

"My suspicion is that the rule is likely headed for litigation in any event," said Scott Segal, a partner at law firm Bracewell & Giuliani who runs an industry coalition called the Electric Reliability Coordinating Council. "That's because groups in the public interest community as well as the regulated community are likely to want to vindicate their interests."

Focus on the interim

The trade group for investor-owned utilities, the Edison Electric Institute, is lobbying EPA for changes to make the rule more workable -- focusing heavily on replacing the interim compliance period that would begin in 2020 (Greenwire, Jan. 30).

The National Rural Electric Cooperative Association, many of whose members are highly dependent on coal power, has started to adopt a similar tone.

Electric cooperatives still have "concerns about the legality and feasibility of the EPA proposal," said spokeswoman Debbie Wing.

"However, if the rule goes forward," Wing said, "then here are some changes that co-ops advocate."

Those changes, like Ameren's proposal, include elimination of the interim 2020 goal and flexibility to extend the statewide compliance dates to at least 2035.

"EPA should also allow states to adjust the compliance date for any individual unit even further based on its remaining useful life, as determined by the state, and any final emission guideline must allow the states to respond to the wide range of sometimes unpredictable conditions that affect the nation's generating resources," Wing said.

Missouri's Public Service Commission focused heavily on the impracticality of the rule's interim goals and its timeline for meeting final targets in comments to EPA.

"To the extent substantial savings can be achieved by allowing a modest extension of the compliance deadline, while achieving the same level of reduction, the EPA should consider allowing such an extension," said Missouri PSC Chairman Robert Kenney.

Kenney has stressed that his state's suggestions are meant to improve, not impede, implementation of the rule.

Limited reach

Even if other utilities follow suit and offer some support in exchange for revisions, they might still fight the rule.

In that vein, Bender said she hopes Ameren will also make clear that it doesn't want to "bog things down" in court or through lobbying efforts. Segal contends there's nothing "fundamentally inconsistent about discussing the legality and assumptions of a rule while at the same time saying there are changes that could make it better."

While Ameren may be showing that it's ready to play ball with EPA, staunch opponents of the rule may be unlikely to jump on the bandwagon.

The American Coalition for Clean Coal Electricity, which represents Ameren and other coal-reliant utilities and companies, didn't budge after hearing Ameren's proposal.

"EPA's plan is unworkable and legally flawed making any suggested changes a moot point in the grander scheme of things," ACCCE spokeswoman Laura Sheehan said in an email.

Twitter: @emilyhholden | Email: eholden@eenews.net

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