Power Plan Proposes New Approach on Climate

By Terry Jarrett

Washington is about to see another controversial chapter in the Trump era. Any day now, the Environmental Protection Agency (EPA) will issue its final “Affordable Clean Energy” rule (ACE). Intended as a replacement for President Obama’s 2015 Clean Power Plan (CPP), the new rule will likely spur debate in Washington. But the ACE offers a realistic plan to address climate concerns while still ensuring the future reliability of America’s power grid.

The implementation of the original CPP was halted by the Supreme Court in 2016. Twenty-eight states had brought suit against it, arguing that the EPA overreached by mandating the reconstruction of entire state power grids.

Along with regulatory issues, states were concerned that the CPP would also drive up electricity prices. Energy Ventures Analysis has estimated that wholesale electricity costs under the plan would increase $214 billion in the next decade, with new power sector infrastructure costing an additional $64 billion. At least 30 states would have seen their monthly electric bills climb by more than 20 percent.

These exorbitant costs—and the regulatory overreach that defined the plan—are now gone. Instead, the ACE will allow individual states to determine the emissions reductions approach that works best for them. And rather than force states to close essential coal power plants, the new rule allows them to upgrade existing plants for increased efficiency.

Notably, the ACE still instructs states to reduce carbon dioxide emissions. But it offers a list of candidate technologies that can be used to improve existing facilities, including advanced systems already in use.

For example, Japan, Western Europe, and China are already using high-efficiency, low-emissions (HELE) plants to burn coal hotter and more efficiently. These HELE systems could be game-changing in the U.S., since they raise coal-burning efficiencies from the typical 33 percent to a more optimum 40 percent. Overall, HELE technologies could reduce coal-plant carbon dioxide emissions by up to 21 percent.

U.S. coal plants have already invested more than $127 billion in scrubbing systems to reduce exhaust emissions 92 percent per kilowatt-hour. The ACE rule will now open the door wide to further improvements.

Much of this comes down to cost, though. Coal remains cheap and plentiful in the United States, but natural gas, wind turbines, and solar panels are gaining market share. However, the price volatility of natural gas, and the limits of pipeline capacity, could impede future expansion. And wind turbines and solar arrays face their own weather challenges.

There will undoubtedly be criticism of the ACE rule. But it provides a path forward to achieve reasonable and affordable emissions reductions for the baseload power plants on which many states rely. Since coal will remain a part of America’s electricity portfolio for years to come, it makes sense to embrace new technologies for a balanced, future energy mix.

Terry M. Jarrett is an energy attorney and consultant who has served on both the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission. He contributes regularly to LeadingLightEnergy.com.