CLEAN POWER PLAN

Midwest states chart predictable courses on compliance work

Michigan joined the list of Republican-led states in the coal-dependent Midwest that are putting the brakes on work to develop Clean Power Plan compliance strategies following last week's surprising stay issued by the U.S. Supreme Court.

Yesterday's decision by Michigan Gov. Rick Snyder (R) comes a day after Gov. Scott Walker (R) issued an executive order prohibiting Wisconsin agencies from working on the carbon rule (EnergyWire, Feb. 16). The Kansas Legislature is also moving quickly on a bill that would likewise suspend efforts on the Clean Power Plan. And similar legislation has been filed in neighboring Missouri.

Not surprisingly, decisions on whether and how to proceed are consistent with previously expressed views on the Obama administration's landmark policy to combat climate change. In states across the region, the Clean Power Plan would require cuts of 37 to 44 percent in carbon emissions over the next 15 years compared with 2012 levels.

Meanwhile, utilities and environmental groups generally agree that the court stay will have little practical effect, at least in the near term, as the shift away from coal will continue.

"The states that have been serious about moving forward are moving forward," said Howard Learner, executive director of Chicago-based Environmental Law & Policy Center, which works across the Midwest. "Other states that are ideologically opposed to the Clean Power Plan and have been dragging their heels have found an excuse."

While some Republican-led states in the Midwest, like Wisconsin, pushed back or showed little progress, Snyder made clear within a month after the final carbon rule was issued that Michigan would comply to avoid being forced to accept a federal plan. Snyder's decision came despite the Michigan attorney general being among those who sued EPA (Greenwire, Sep. 2, 2015).

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The Michigan Agency for Energy in December announced initial Clean Power Plan modeling results showing the state could meet initial carbon reduction goals through the mid-2020s just by carrying out existing policies (EnergyWire, Dec. 23, 2015). A public "stakeholder engagement" process kicked off just a week before last Wednesday's Supreme Court decision.

The decision to halt work comes despite the urging of environmental advocates.

"Michigan should continue crafting a plan that will save money, improve public health and protect our natural resources from the worst impacts of climate change," said James Clift, policy director for the Michigan Environmental Council.

Kan. bill moves quickly

In Kansas, also among the states suing EPA, the state Senate wasted little time after the Supreme Court's stay to pass a bill that would halt work.

A measure blocking further work on the carbon rule was introduced as an amendment to an existing bill a day after the Supreme Court decision. The legislation, which would also abolish the Kansas Electric Transmission Authority, passed the Senate 37-2 and goes to the House.

The author of the amendment, state Sen. Rob Olson (R), and the head of the House Energy Committee, state Rep. Dennis Hedke (R), also lead the state's joint Clean Power Plan Implementation Study Committee. Both lawmakers, who have said they don't believe that humans are causing climate change, sent letters to the Kansas Corporation Commission (KCC) and Gov. Sam Brownback (R) on Thursday asking the KCC to halt efforts to hire a consultant to model Clean Power Plan scenarios.

The legislative committee was created by a bill signed last year by Brownback, another Clean Power Plan critic. The measure was guiding the state's efforts to develop a compliance plan, which required the Kansas Department of Health & Environment (KDHE) to work with utility regulators.

The KCC had hosted educational sessions on the rule and was in the process of conducting a formal investigation on the carbon rule to evaluate its impact on consumers and electric reliability (EnergyWire, Dec. 4, 2015).

The KDHE scheduled a series of three listening sessions to be held across the state beginning Feb. 25. But a note on the department's website indicated that the meetings were canceled.

Meanwhile, the Kansas House Energy and Environment Committee will hold a hearing this morning on the legislation to stop work on the Clean Power Plan.

Dorothy Barnett, executive director of the Hutchinson, Kan.-based Climate and Energy Project, is among those who will testify against stopping work on developing compliance plan. Doing so would stall efforts to improve energy efficiency policies and is shortsighted, she said.

"We think that's risky," Barnett said. "They're putting all of their eggs in the basket of there aren't going to be carbon regulations."

Katharine McCormick, a policy advocate for the Natural Resources Defense Council, sees actions by Wisconsin and other states that are stopping work as largely symbolic. But, she said, states such as Missouri, where legislators are trying to stop the process, could fall further behind other states in the region in developing clean energy.

Some states keep up work

Not all states in the Midwest are stopping work on the Clean Power Plan. The Iowa Department of Natural Resources will hold a stakeholder meeting Monday. Part of what will be discussed is what approach the state will take.

And in Minnesota, officials including Gov. Mark Dayton (D) have vowed to move forward under the belief that some form of the climate regulation will ultimately emerge (EnergyWire, Feb. 16).

For all of the spin and political jockeying in recent days, even utilities that support halting work on implementation plans say the court's action will have little if any effect on plans to retire older, inefficient coal-fired power plants and replace them with cleaner natural gas, renewable energy and energy efficiency.

Jackson, Mich.-based Consumers Energy, for instance, said it supports the governor's decision to halt work. But the company, which plans to shut down a third of its coal fleet, vowed to "continue moving forward with its transition to a cleaner energy portfolio," the company said in a statement.

The CEO of Detroit-based DTE Energy Co. made similar comments to analysts and investors last week, saying the court action wouldn't have much impact until the late-2020s, when the company might face the potential of newer, larger coal plants.

Gina Penzig, a spokeswoman for Topeka, Kan.-based Westar Energy Inc., Kansas' largest investor-owned utility, said the company likewise backs legislation to stop work on a compliance plan as long as it doesn't also stop the state's efforts to litigate the rule. Meanwhile, the company continues to add more wind generation to its portfolio and will have more than 1,700 megawatts by early 2017.

For now, utilities and clean energy advocates agree that it's economics more than policy that's influencing investment decisions.

"If you have declining electricity sales and you have natural gas prices, as of this moment, of $1.90, coal does not compete very well," said the Environmental Law & Policy Center's Learner. "That's what's affecting power plant owners' decisions today."

Twitter: @jefftomich Email: jtomich@eenews.net

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