The Energy Times: Carbon Plan’s Uneven Impact

The Energy Times

Carbon Plan’s Uneven Impact

May 6, 2015

By John Di Stasio


The utility sector is undergoing significant change driven by a variety of factors and it’s this transition that keeps me engaged, learning and sharing. I recently joined the Large Public Power Council, LPPC, as president, to focus on this transition.

The LPPC, established in 1987, represents the largest asset-owning public power systems across the United States plus Puerto Rico.

The LPPC members, also members of the American Public Power Association, are focused on reliability, affordability, environmental stewardship and local governance. We collectively serve a population of 30 million people. Our members own over 86,000 megawatts of generation, nearly enough to serve two states the size of California, and we own 35,000 circuit miles of high voltage transmission. We are large asset-owning utilities.

Our members are uniquely impacted by policy and regulation that seek to transform the generating asset mix, increase regulatory requirements and complexity, eliminate our financing tools, or erode the value of assets paid for by our consumers.

We respect the authority of policy makers in defining the societal outcomes for the energy sector, but want to be sure that those outcomes don’t also come with a level of prescription that limit our flexibility and commitment to the communities that we serve.

There are several issues of importance for LPPC including improvements to cyber and physical security and resiliency, retention of tax exempt finance for public purpose infrastructure, our support for energy efficiency and emerging technologies, transmission policies and organized market rules.

But the EPA’s Clean Power Plan, at present, is our focus of attention. We are at the table to be sure that we are creating a path forward that strikes a necessary balance between reliability, affordability and environmental stewardship.

The U.S. Environmental Protection Agency’s Clean Power Plan is the most transformative national energy regulation ever proposed. If implemented, as modeled by EPA, it will have a profound and uneven impact as the entire generation supply mix and regional power flows will change.

Many members of the Large Public Power Council question the EPA’s authority to advance such a rulemaking, but we also recognize the importance of getting it right as it advances, so we are focused on workability. Our preference would have been for Congress to consider these issues first.

Relative to workability we think EPA needs to consider that the electric grid and power flows don’t function along state boundaries so an overlay of the state by state air regulation hierarchy is certain to have problems in implementation.

More time is needed to get this right regionally in concert with the physical characteristics of the electric grid.

The interim goals front load compliance to an extent that many systems need to achieve greater than 80 percent of their eventual compliance by 2020.                                       

Reliability of the interconnected grid needs to be considered in advance of finalization of the rule and commencement of investments to comply

The baseline assumptions need to be revisited. Assuming that under construction nuclear plants are already complete is extremely optimistic and unnecessarily costly for those states pursuing new nuclear plants.

The time required to finance, site and construct new infrastructure is many times greater than the assumptions in the proposed rule.

Our 25 members are unique since they mirror the diversity of our nation geographically, politically, by resource mix, income and education. One thing our members all share is a commitment to the consumers that own and govern our systems and the communities that we serve. It is truly an honor to contribute to that mission.

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Wednesday, May 6, 2015