E&E News: Largest Public Power Utilities Say ACE Rule Doesn't Matter

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June 26, 2019

By Rod Kuckro, E&E News Reporter

Largest Public Power Utilities Say ACE Rule Doesn't Matter

Pat Pope. Photo credit: Nebraska Public Power District

Executives from five of the nation's largest public power utilities agreed yesterday that EPA's Affordable Clean Energy, or ACE, rule has no bearing on the plans they have to reduce carbon dioxide footprints in response to either state direction or consumer demands.

"I don't spend a lot of time worrying about the ACE rule to be honest with you," Pat Pope, CEO of the Nebraska Public Power District (NPPD) and chairman of the Large Public Power Council (LPPC), said at a media roundtable yesterday in Washington, D.C.

The LPPC comprises the 27 largest not-for-profit public power utilities. They operate in 21 states and Puerto Rico, providing electricity to more than 30 million customers.

The LPPC board met this week and hosted a meeting with the press featuring CEOs and general managers to discuss their issues.

The LPPC utilities see their role vis-a-vis the ACE rule as "trying to be a resource to the federal government" on decarbonization "in ways that might be done in an optimal fashion" while providing flexibility, said John Di Stasio, president of the LPPC.

Asked if the ACE rule matters, Thomas Falcone, CEO of the Long Island Power Authority, said flatly, "No."

Falcone noted the New York Legislature last week "in the absence of federal policy" approved a sweeping climate plan that mandates a carbon neutral economy by 2050 and carbon neutral grid by 2040.

The state has one coal plant left that will shut down next year, he said. "It's really state energy policy rather than federal on the climate issue right now," Falcone said.

Steve Wright, general manager of the Chelan County Public Utility District in Washington, said that state — which as no coal plants — has put in place a clean electricity transformation act to cut carbon emissions.

And Jackie Sargent, general manager of Austin Energy in Texas, said the utility has migrated from planning what generation resources it needs to a "generation resource and climate action plan."

"We've been transitioning to renewable energy and emphasized energy efficiency and demand-side management" to achieve lower growth in electricity demand, she said.

As Austin Energy adds more renewables, it will be able to "exit its coal position by 2022," she added.

No lifeline for coal

LPPC Chairman Pope said that while his utility is "certainly moving ahead with ways to mitigate our carbon footprint, that doesn't necessarily mean we're going to close a coal plant."

But the utility is taking other steps on the path to a cleaner grid.

NPPD has the 1,365-megawatt coal-fired Gerald Gentleman Station and the smaller 225-MW Sheldon Station. It also has a 162-MW share in a coal plant with the Omaha Public Power District.

One of the two Sheldon units — at around 105 MW and built in 1961 — is about to be converted to a hydrogen-fueled facility in a deal with a large industrial customer, Pope said. The conversion, which is slated for later this year, would displace roughly 1 million tons of CO2 a year, Pope said.

As to the improvements in coal unit heat rates endorsed as a way to curb CO2 in the ACE rule, Pope said that "we're always going after those efficiency improvements because we're all about lowering the costs for our consumers."

"The low-hanging fruit of those types of projects is long gone. The incremental opportunities for others is going to be very small," he said.

NPPD is also exploring carbon capture and sequestration.

"We're situated in an area where there are probably more options for sequestration than in other areas of the country, so we're going to take a hard look at that," Pope said.

"In the Carolinas, we have and are continuing to retire coal units" in partnership with Duke Energy Corp., said Roy Jones, CEO of ElectriCities of North Carolina, which has customers in North Carolina, South Carolina and Virginia.

Like NPPD's Pope, Jones doesn't see ACE extending the life of coal plants. "No sir, I don't think it's going to make any difference," he said. "When I look at the rule, if the heat rate improvements at a plant were economic, they would have already been done."

In the communities ElectriCities serves, "having a finger on the pulse on the community is very important," Jones said.

"Without exception, every one of them have individuals in their communities who want to do more with renewables" such as rooftop solar, community solar and energy efficiency to reduce their carbon footprint, he said.

North Carolina has a goal to reduce CO2 emissions 40% by 2040, "and we're 23.7% of the way there already," Jones said.

"What are the things that we can do to reduce that carbon footprint in each community and in the aggregate will make a difference?" he added.

LPPC President Di Stasio said that more of the conversations within the LPPC are about certainty and that having continual rulemaking and litigation on rulemakings aren't necessarily helpful.

The LPPC, he said, had told former EPA Administrator Scott Pruitt that "it's very difficult in our industry to make long-term decisions on four-year election cycles."

Wednesday, June 26, 2019