Monthly Archives: June 2014

Environmental Protection Agency rule could mean higher bills are on the horizon

On June 2, the Environmental Protection Agency released its long-awaited carbon rule for existing power plants called the Clean Power Plan. The rule, which is still in draft form, is lengthy and complicated with more than 1,600 pages including supporting documents. The rule falls under Section 111(d) of the Clean Air Act, which has never before been utilized in this way. The Environmental Protection Agency’s goal with the Clean Power Plan is to reduce carbon dioxide emissions from existing power plants in the United States by 30 percent by 2030.

Unlike other environmental regulation, which applies specific emission limits on a plant-by-plant/source-by-source basis, the Clean Power Plan dictates that carbon emissions are reduced on a state-by-state basis. As a result, when the final rule is published in 2015, South Mississippi Electric (SME), Coast Electric’s wholesale power provider, will have to work with the other Mississippi electric utilities, the Mississippi Department of Environmental Quality and the Public Service Commission to develop a statewide plan to lower carbon emissions to 732 lbs/MWh by 2020 and 692 lbs/MWh by 2030. To put that into perspective, SME’s fossil fuel plants emitted 1,070 lbs/MWh, slightly less than the state average of 1,093 lbs/MWh, in 2012.

Since 2005, SME has reduced its carbon intensity by 15 percent, without impacting economics or reliability to its members. The proposed Clean Power Plan appears to drive an even more rapid acceleration in carbon reduction, to the point of threatening reliability and significantly increasing energy prices.

It is not clear how the Environmental Protection Agency reached these punitive targets for Mississippi, but it is clear that Mississippi will not fare well under the Clean Power Plan. We also know that the Environmental Protection Agency’s baseline for this rule was a “snapshot” of the electric industry emissions in 2012. Natural gas prices were at their lowest in decades in 2012, causing power generation to switch from coal to natural gas; as a result, carbon emissions were comparatively low in Mississippi in 2012.

Again, we find ourselves disappointed in the Environmental Protection Agency and believe they have exceeded their authority by moving beyond specific plant emission regulations. The Environmental Protection Agency is using its administrative power to establish future energy policy by significantly reducing fossil fuel generation, which is the most efficient and reliable generation we have available. As Mississippians, we are concerned that these regulations will increase electricity prices, further harming the economy and threatening jobs throughout the state.

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