REGULATION

White House opens doors to eleventh-hour pleas on Clean Power Plan

Multiple state environmental regulators will meet Tuesday with senior Obama administration staff in an attempt to shape the final version of the forthcoming U.S. EPA rule to curb carbon emissions from power plants.

The meeting is the latest in a string that began about a month ago with a visit by a six-person delegation from the Sierra Club to an Office of Management and Budget conference room in Washington, D.C.

OMB, an arm of the White House, is leading the interagency review that will culminate in the final EPA rule being released sometime in August, according to the current administration schedule.

Such meetings serve to punctuate the robust and often-acrimonious debate that has been going on during the more than 13 months since EPA proposed its Clean Power Plan, which is designed to cut CO2 emissions 30 percent compared with 2005 levels by 2030.

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In the process, the EPA plan also would substantially change the way electric power has been fueled, produced and used for more than 100 years.

"Essentially, it's one last shot to lobby them on what your keys issues are and what you'd like to see in the final rule and why," said a participant in the National Climate Coalition's June 24 meeting at OMB.

The meetings are part of a Washington ritual that stakeholders engage in during the final weeks before OMB finalizes its interagency review of a rulemaking.

OMB does not initiate the meetings. Parties affected by the rulemaking ask.

The time is set at 30 minutes, and staff members from OMB, EPA, the Council on Environmental Quality and others are there to listen. If the attendees are lucky, a staffer may ask a clarifying question.

"They never tip their hand or get into a debate" or reveal what's in the rule under review, said one veteran Washington association executive who has sat in on numerous such meetings.

Tuesday's meeting was requested by the Georgetown Climate Center, which is known for its facilitation of discussions among states, power companies and nongovernmental organizations on options for complying with the Clean Power Plan.

Among those in attendance will be John Quigley, secretary of the Pennsylvania Department of Environmental Protection. He hopes to "stimulate a conversation" about how a state such as his can get the best outcome from EPA. "We're all in the same boat pushing against the string; until we see the final rule, it's difficult to have anything more than a conceptual conversation," he said. Washington state will also be represented.

In the past month, OMB and EPA officials have heard from:

  • Edison Electric Institute and utility CEOs and representatives from American Electric Power Co. Inc., DTE Energy, Berkshire Hathaway Energy and Duke Energy Corp.
  • MJ Bradley & Associates and electric utilities that are members of its Clean Power Plan Initiative, including the CEOs or senior executives of Dominion, National Grid, NextEra, Exelon, PSEG, Pacific Gas and Electric Co. and Calpine Corp.
  • The National Climate Coalition and its members, including the American Public Power Association, Calpine, LS Power and Edison International.
  • AJW Inc. and clients, including Siemens, Johnson Controls, Honeywell, the National Electrical Manufacturers Association, Schneider Electric, Ameresco, United Technologies and the U.S. Green Building Council.
  • The Gephardt Group, led by former House Majority Leader Richard Gephardt (D-Mo.), along with Prairie State Generating Co., the Missouri Joint Municipal Electric Utility Commission and T&A Inc.
  • The National Mining Association.
  • The Newmont Mining Corp.
  • The Sierra Club.
  • The Clean Air Task Force.
  • The Canadian Electricity Association.

More meetings are scheduled.

Trying to make an impression, change minds

The Edison Electric Institute, which represents investor-owned utilities, had its second meeting at OMB on June 6. This time, EEI President Tom Kuhn brought along Nick Akins, CEO of American Electric Power; Lynn Good, CEO of Duke Energy; and Greg Abel, CEO of Berkshire Hathaway Energy.

The administration countered with EPA air chief Janet McCabe and her counsel, Joe Goffman, as well as Brian Deese, senior adviser to President Obama, and Dan Utech, deputy assistant to the president for energy and climate change.

EEI officials declined to talk about the session, but in a statement, EEI's Quin Shea, vice president for environment, said the meeting "was part of our on-going outreach efforts on the Clean Power Plan."

It may not seem productive for a CEO to come to Washington for a 30-minute meeting.

"When CEOs of big companies like to come into town, they want to talk," said one utility industry attorney. An association such as EEI "brings them in to show the impact, to show the importance and that the decisions made [about the final rule] are hugely critical and for those companies mean millions, perhaps billions of dollars over the long run," he said.

So even with the parameters of the meeting, "That's certainly a good investment of their time to fly into Washington and take that meeting even if they sit there and say nothing but their name," the attorney said.

Meetings can bring about changes

"We've seen examples of when the interagency review process has brought additional facts and perspectives to the table," said Kirk Johnson, senior vice president of government relations for the National Rural Electric Cooperative Association.

"There have been modifications and tweaks to rules that have occurred during the interagency review process," he said yesterday immediately after his meeting with OMB.

Johnson said he used his 30 minutes to focus "on some of the high-level concerns that we've outlined previously that the plan as drafted would result in some significant costs to electric co-ops, would result in some significant stranded investments to co-ops, and there are ways to modify the proposal that would reduce or eliminate" those costs, such as "modifications to each of the building blocks, changes to the interim and final goal dates, and the idea of a dynamic reliability safety valve."

Chris Miller is with AJW, a Washington-based lobbying shop. He was formerly senior adviser to Senate Majority Leader Harry Reid (D-Nev.) on energy and environmental issues.

On June 22, Miller brought energy technologies companies Honeywell, Siemens, Schneider Electric and Johnson Controls to OMB for their 30-minute confab.

The value of these sessions is to bring up aspects of how the rule could play out "that EPA doesn't necessarily have to think about but OMB does," he said.

For his clients, which he describes as "American companies with American jobs," Miller said it's vital that OMB "understands that energy efficiency is a compliance option that's low-cost and very flexible and real. It's been a little bit of a challenge for EPA to get their arms around that, so we wanted to make sure that OMB saw the economic potential in addition to the environmental compliance part of it, that we could deliver probably the lowest-cost or one of the lowest-cost solutions for compliance."

His pitch may have hit home, as the normally half-hour session was prolonged by about 10 minutes of "solid" questions from staff, Miller said.

Two lawyers from one of the proposed rule's harshest critics, the National Mining Association -- Katie Sweeney and Michael Kennedy -- met with OMB on June 23. They brought along Peter Glaser, an attorney with Troutman Sanders who has been arguing that the rule is illegal and that EPA does not have authority to enforce the Clean Power Plan. Glaser represented NMA in a recent Supreme Court case challenging EPA's mercury standards. Also at the meeting were two consultants from Energy Ventures Analysis, a firm that has conducted research for NMA claiming electricity prices could increase substantially under the rule.

"This is partly due diligence," said Luke Popovich, NMA's spokesman. "There's always going to be a difference in tone between an agency like OMB and an agency like EPA that is hastily trying to do the president's bidding and push the rule out the door by the deadline," he said.

"Our experience with OMB is they just listen," said Conrad Schneider, advocacy director at the Clean Air Task Force, an environmental nonprofit focused on promoting low-carbon energy. Schneider said his group used its 30 minutes to highlight major concerns, and OMB asked just one clarifying question.

"We were not expecting that something we said there was going to make a major change in the rule," he said. "We were really just reinforcing points we had already made."

If anything, Schneider said he hoped some of what CATF presented might "shore up" decisions EPA already made that OMB is reviewing.

CATF brought OMB a two-page summary of proposals to avoid gaming and carbon leakage under the rule and to expand expectations about the reductions states can achieve.

On June 24, when OMB and other staff met with the National Climate Coalition, a single attendee acted as spokesman for the group.

"You want to make wise use of that 30 minutes," an attendee said. "It's a step in the process and an opportunity that you have to take, frankly, whether it does any good or not."

The coalition had five specific "asks" for OMB. The first was to let states have flexibility to design their own glide path or at least move the interim goal back, he said. Next was to give flexibility to owners of electric generating units to "make sure there is as wide a diversity of compliance options as possible."

The third was the need for a reliability safety valve and reliability review of state plans, followed by some promise that improvements in the heat rate of a generating unit would not trigger review under EPA's New Source Review program.

Lastly, the attendee said, the coalition wants OMB to provide the "maximum opportunity for interstate cooperation, collaboration and trading short of formal multistate plans" such as the Regional Greenhouse Gas Initiative.

"Prudency requires that we at least go in and take the meeting. Whether there's any realistic chance that there's room for changes or that they'll take to heart what we say, one never knows," the attendee said.

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