Climate

Ga. PSC's Echols says state taking wait-and-see approach on power plan compliance mechanism

U.S. EPA's Clean Power Plan proposes a 44 percent reduction in emissions for Georgia. How is the state preparing for the rollout of EPA's final plan later this year? During today's OnPoint, from the National Association of Regulatory Utility Commissioners' winter meetings, Tim Echols, commissioner on the Georgia Public Service Commission, explains why he believes a regional compliance plan would amount to a transfer of wealth for his state. He also talks about the role he believes new nuclear should play in EPA's final plan.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint from the NARUC winter meetings in Washington, D.C. I'm Monica Trauzzi. With me today is Tim Echols, commissioner with the Georgia Public Service Commission. Commissioner, thank you for joining me.

Tim Echols: Yes, it's been a great conference here, learned a lot.

Monica Trauzzi: Fantastic. So EPA's Clean Power Plan, clearly one of the key talking points and issues here at the NARUC winter meetings. In Georgia, EPA has proposed a 44 percent reduction in emissions. Georgia is one of those states at the higher end of the emissions reduction scale. What have your state's biggest challenges been in reducing emissions on your own?

Tim Echols: You know, these nuclear reactors that we're building at Plant Vogtle, they're a big part of our compliance. So certainly with Georgia and South Carolina leading the way in new nuclear power, we want to see these projects to the end and see them successfully online. That's going to be an important part of our baseload power. But we also have become the fastest-growing solar state in the U.S. We're the fastest and largest market for the Nissan Leaf, for the electric cars, and of course their storage ability that they have. We already have 10,000 Nissan Leafs in Georgia and adding probably 1,000 every month. We've also secured some Oklahoma wind power from EDF, 250 megawatts, and I think we're going to probably get some more of that. So Georgia's really making a lot of progress in a number of areas with clean energy.

Monica Trauzzi: So then why do all five commissioners on your commission then oppose the steps that EPA is taking?

Tim Echols: Well, we oppose the rule on its face because we feel like that we're elected by our voters to regulate energy policy, and we believe this rule encroaches on our constitutional duty to regulate energy. So, yes, we oppose it on its face; we're not really talking about any compliance measures yet because the rule is not officially the rule yet. So we'll wait, let the rule harden, and then we'll get to work on what we need to do to comply with it.

Monica Trauzzi: Is that going to leave you enough time to come up with a compliance mechanism for the plan?

Tim Echols: I think so, given that the interim targets now are possibly being moved, I think we've got time to do that, and our EPD is quarterbacking this, our Environmental Protection Division is quarterbacking this with the PSC giving advice as well as Southern Co., GEFA, our Environmental Finance Authority, our cities, our EMCs. I think we've got everybody engaged. We're ready but we don't want to raise the white flag yet and say we're accepting the rule as it is on its face, because we think there's still a lot wrong with this rule.

Monica Trauzzi: What types of discussions are happening in your state in terms of a regional plan and linking up with other states?

Tim Echols: Well, as I said to some folks today, any kind of plan to work with another state, way beyond Georgia, which the rule allows, to me is more or less a wealth transfer from the state of Georgia. If we've got a 44 percent number on our CO2 diet and we're working with a state that doesn't really have to do anything, they're going to be getting part of our money. And as an elected official in Georgia, I'm not excited about transferring any of my ratepayers' or my voters' wealth to any other state. So we're not really thinking about that at this point. We're looking at our solar portfolio, adding more to that, the wind that we're importing. Of course we've got a lot of great natural gas combined-cycle units going, we want to keep as many of these coal units going as possible. We probably would wind up closing all the units that aren't scrubbed. And of course we've got to finish this nuclear power plant because it's going to be an important part of our base load.

Monica Trauzzi: We're going to talk about that a little later. So here at the NARUC meetings we are seeing a wide range of perspectives on the Clean Power Plan and whether it's workable or not. Are you speaking with commissioners from other states who support the plan? And has your opinion been swayed at all during some of these discussions?

Tim Echols: You know, the good thing, I guess, about what's happened with the reaction to the rule is that both red states and blue states have complained. Not everybody's complained, but it hasn't just been Southern states. There've been states like North Carolina, they've complained, and they've got an RPS, or renewable portfolio standard. Georgia, Alabama, Mississippi, we don't. So we've gotten a lot of pushback from a number of states, especially when it comes to measures already implemented to curb CO2. So I think that the president and the EPA, I think they're listening, I think there will be some reprieve. I don't know exactly what that's going to be, but with Gina McCarthy here today and her hinting about that again, I'm optimistic. I'm in fact very encouraged after leaving this meeting.

Monica Trauzzi: And EPA has suggested that there might be changes to some of the state targets as well as the building blocks. What types of changes would you like to see to the building blocks?

Tim Echols: Well, certainly the formula they used for counting our new nuclear, we would like that sweetened up a bit in the plan. There's only two states that it really impacts, three if you count Tennessee with the finishing of their project. So we would like to see some change in the way that that is counted toward our compliance number. I've complained to the EPA about the behind-the-meter solar, because we don't have an RPS, we don't have what the EPA calls a regulatory trigger, that they're not going to count some of that solar that we have behind the meter like with Ikea and Purina and other good corporate citizens in Georgia. And I've also complained about the 21 million acres of pine forest that we have that eat CO2 for breakfast, lunch and dinner that we aren't getting any credit for that towards compliance.

So I feel like the big pushback though has been on this nuclear power, and I'm very optimistic that there's going to be a change on that. I just don't know what it's going to be, but I am optimistic that our united voices, especially in Southern states, has been heard -- not to mention the fact that the president is really behind nuclear power. He knows, and I've been told by his climate czars in the White House, that he has to have -- in order to reach 80 percent clean energy by 2050 -- he has to have a substantial amount of nuclear power. So he gave us the loan guarantees. He's not against nuclear power. We just need him influencing the EPA just a bit to sweeten up that formula so that it causes other states to want to follow the lead of Georgia and South Carolina.

Monica Trauzzi: So in your state you're waiting on the construction of two reactors. How important is the completion of that facility to the reduction of emissions in your state?

Tim Echols: If we didn't have Plant Vogtle 3 and 4, that number of 44 percent would go up close to 60, and imagine trying to cut your CO2 by 60 percent. I think it would be almost impossible for us to meet that number without some serious collaboration and having to pay a lot of other states in however this collaboration is going to work, so we need to finish this project.

Monica Trauzzi: There have been construction delays though. Is the failure to adhere to the original construction and deployment schedule evidence that nuclear is too costly in the United States and too risky as part of the U.S.'s overall energy strategy?

Tim Echols: I think you could only conclude that if you say that the Atlanta Falcon stadium delays and overruns means that we can't really play football, or that our streetcar delay means that we really shouldn't have a streetcar. This plant was certified with zero contingency, zero, and we can't build a gas plant or anything else on budget because of labor problems that we've had. We knew, the commission knew there would be added costs; we just didn't know how much. And we will have the mother of all prudency here in 2019 by order, which we set, and when Unit 3 comes online. And we'll look at every single added cost that we've had and we'll determine yes this is prudent, no it's not prudent, but we'll take it then. I don't want to nickel and dime our ratepayers at every single semiannual hearing with, "Oh, we've got a cost overrun for cybersecurity or for taxes or for this" -- I don't want to wear them out. I want to keep public opinion strong behind nuclear power, because one day we might want to build some more.

Monica Trauzzi: All right, one final question on reliability. The Brattle Group has presented a report here at the winter meetings contending that the power plan would not pose sort of an overall threat to reliability. Do you think that the power sector is transforming quickly enough to ensure reliability under the Clean Power Plan?

Tim Echols: Well, I sat in on that breakfast with the Brattle Group, and it's quite a smart Harvard Ph.D. that presented that report. That's not what I heard him say. I heard him say that there's a cost associated with compliance, and then there's a cost associated with compliance with reliability. There's two levels of cost here. And if you're going to be able to keep the power reliable, which is what your residents in Georgia, that's what they're used to, they're used to no blackouts, no brownouts. We're not a Texas or a California -- we have incredibly reliable power. That's why Georgia's the No. 1 site selection for new businesses in the U.S., because our power is cheap and it's reliable. So I don't think folks are going to be able to comply with this with reliability without spending a fortune.

Monica Trauzzi: All right, we're going to end it there. Thank you for joining me, very interesting discussion.

Tim Echols: Great, thanks.

Monica Trauzzi: And thanks for watching, we'll see you back here tomorrow.

[End of Audio]

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