State utility reps wary of EPA’s coming carbon rules

Utility and state agency representatives at a legislative hearing expressed concern over the potential costs of a proposed EPA rule to cut carbon emissions from power plants and said reduction goals in the plan fail to account for progress the state has already made.

The EPA rule, the final version of which is expected to be released in June, calls for Wisconsin utilities to reduce carbon output by 34 percent by 2030. States would be allowed to act individually or partner with other states to develop compliance plans. Gov. Scott Walker and others have vowed to sue the EPA over the rules if the agency goes ahead with them.

Bart Sponseller, director of the DNR’s Bureau of Air Management, told Wednesday’s joint hearing of the Senate Committee on Workforce Development, Public Works and Military Affairs and the Assembly Committee on Energy and Utilities that Wisconsin has made “significant strides” in the use of renewable energy and in energy efficiency in the last 15 years. The EPA’s plan, he said, penalizes Wisconsin relative to other states that have not taken similar action.

PSC Commissioner Ellen Nowak said the rules could cost between $3.3 billion to $13.4 billion to implement, not counting upgrades to pipelines and transmission infrastructure. She said the gulf in estimates is due to considering different assumptions in the state’s strategy to comply and differing estimates of natural gas prices.

The reduction targets are based on what the EPA projected could be saved through efficiency improvements in existing coal plants, increased use of natural gas for power generation, use of renewable and nuclear power, and reduced demand through energy efficiency improvements. Nowak said the PSC found that there would only be a 15 percent carbon reduction achieved by following the EPA’s strategy.

She and others also expressed concerns with how the rule would affect reliability of power in the state and what they described as short timetables for planning and compliance in the proposed rule.

Utility representatives testifying before the panel echoed these concerns and said the biggest issue for them is getting credit for earlier action to reduce emissions and increase efficiency. They also said the EPA was being unrealistic in its estimates of how much efficiency can be improved at coal-fired plants and noted that coal-fired plants may have to be run less often, reducing the plants’ efficiency as they power up and down.

Republicans worried about the cost of the plan and the potential for job losses due to increased energy costs for businesses and the possibility some coal-fired plants could be closed. They also questioned the extent to which the EPA rule would affect global carbon emissions while countries like India and China ramp up their use of coal for power generation.

Dems, meanwhile, said the increased investment could lead to job growth in the state and questioned assumptions the PSC made in its cost projections. Rep. Josh Zepnick, D-Milwaukee, accused Republicans for relying on hypotheticals in discussing the rule’s potential impacts.

Keith Reopelle, policy director for Clean Wisconsin, said not acting to curb carbon emissions would carry a “huge cost” due to the effects of global warming on winter recreation and tourism, agriculture, coldwater fisheries and public health.

Reopelle noted the state can make changes beyond those recommended by the EPA to reduce carbon, and pointed to the possibility of burning natural gas and coal simultaneously in some plants, co-generating heat and power at existing plants and boosting efficiency programs such as home weatherization for those with low incomes.

— By David A. Wise