Transcript EPA Greenhouse Gas Regulations for Power Generation

“From Plant to Plug”
A Legal and Policy Critique of 111(d)
Conference of Western Attorneys General
July 22, 2014
Karl R. Moor
Senior Vice President &
Chief Environmental Counsel
Southern Company
Unveiling Climate Action Plan
“I’m also directing the EPA to develop [standards for
existing power plants] in an open and transparent
way, to promote flexibility to different states with
different needs . . .”
Remarks by the President on Climate Change
June 25, 2013
Elements of “Clean Power Plan”
• Focal point of President’s Climate Action Plan
• Establishes CO2 emissions standards for existing
power plants under Section 111(d) of the Clean Air Act
• Requires 30% reduction of CO2 emissions from power
sector from 2005 levels by 2030
• States must show “meaningful progress” by 2020
Legal Hurdles for 111(d)
“ . . . EPA’s authority under the Clean Air Act is
limited to developing a procedure for states to
establish emissions standards for existing sources.
EPA, if unchecked, will continue to implement
regulations which far exceed its statutory
authority to the detriment of the States . . .”
Letter from 17 State Attorneys General
to EPA Administrator McCarthy
September 11, 2013
Legal Hurdles for 111(d)
(cont’d)
“ . . . a standard of performance of performance under
section 111(d) cannot be established for any air pollutant
– HAP and non-HAP – emitted from a source category
regulated under section 112.”
“ . . . if EPA is regulating source category X under section
112, section 111(d) could not be used to regulate any HAP
emissions from that particular source category.”
U.S. Environmental Protection Agency
March 29, 2005
Legal Hurdles for 111(d)
(cont’d)
D.C. Circuit Rejects EPA Reading of Section 111
“ . . . EPA has attempted to change the basic unit to which
[Section 111] appl[ies] from a single building, structure,
facility, or installation – the unit prescribed in the statute
– to a combination of such units. The agency has no
authority to rewrite the statute in this fashion.” (emphasis added)
ASARCO v. EPA, 1978
BSER – “Inside”
Performance standards reflective of
emission limitation achievable through
application of “best system of emission
reduction” at single source
BSER – “Outside”
“ . . . is based on a range of measures
that fall into four main categories”
(1) efficiency
(2) environmentally-manipulated
dispatch
(3) renewable and nuclear power
(4) demand-side efficiency
BSER “Building Blocks” Erode
State Flexibility
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Assumes 6% efficiency improvement at each coal-fired
unit on a continuous basis
Increases natural gas combined cycle dispatch to 70%
capacity factor
Assumes unprecedented increases in renewables and
penalizes states currently constructing low- and zeroemitting generation projects
Applies selective and un-sustained demand side
energy efficiently to all 50 states
Electricity Generation by Fuel Type, 1993
Coal -- 53%
Nuclear -- 19%
Hydro/Renewables -- 11%
Natural Gas -- 13%
Oil and Other Liquids -- 4%
Changes in the U.S. Fuel Mix
Electricity Generation by Fuel Type, 2011
Coal -- 42%
Nuclear -- 17%
Hydro/Renewables -- 13%
Source: U.S. Energy
Information
Administration 2013
Annual Energy Outlook
Natural Gas -- 25%
Oil and Other Liquids -- 1%
Structural Hurdles for States
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Carbon Integrated Resource Plan (Carbon IRP)
In vertically-integrated states, coops, munis and IPPs
must be brought into dispatch process
Who will control dispatch process – PUC or DEQ?
Carbon IRP leads to reshuffling dispatch order
Changes to generation portfolios take years
Decisions must be made now
Structural Hurdles for States
(cont’d)
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“Acceptable” SIPs require regulatory structures that
are non-existent in many states
Multi-state plans necessitate interstate compacts;
require state legislative approval and comply with
Compact Clause
SIPs due by June 2016
Clock is ticking
Questions?
Karl Moor
Senior Vice President &
Chief Environmental Counsel
Southern Company
[email protected]