October 31, 2018 Read More →

Utilities, states question administration’s revised carbon dioxide rule

S&P Global Market Intelligence ($):

The Trump administration’s replacement for the Clean Power Plan has generally been seen as positive for the U.S. coal sector, but states and utilities have expressed concerns about compliance with the rule in comments published ahead of an Oct. 31 deadline.

The Affordable Clean Energy, or ACE, rule focuses on deploying heat-rate improvements at individual coal plants instead of allowing plants to comply by shifting to other types of generation and has raised some concern in a sector where utilities have indicated no plans to slow retirements of older, less efficient coal plants. While some stakeholders are applauding the Trump administration’s shift to state authority over power-sector carbon dioxide emissions, even those who support ditching the Clean Power Plan are calling for tweaks to the proposal.

The Electric Power Research Institute also said the rule’s focus on a rate-based standard, in which compliance is based on emissions per unit of electricity generated versus total emissions, takes away utilities’ option to reduce a plant’s generation levels to comply with the rule.

The industry coalition Utility Air Regulatory Group expressed a similar concern and said the U.S. Environmental Protection Agency should recognize that states can permit affected sources within a state to average their emissions. The EPA acknowledged this could result in lower costs but was concerned that averaging would encourage generation-shifting, the coalition wrote. It said it would address that concern and others, including the focus on a rate-based performance standard, in future comments that do not appear to have been published by the EPA yet.

Hinting at why even states that largely back Trump’s pro-coal policy goals might have problems with the policy, Hawaii Gov. David Ige and North Dakota Gov. Doug Burgum, chair and vice-chair, respectively, of the Western Governors’ Association, wrote Oct. 10 that the administration did not consult with governors or their designees.

More ($): Supporters of ditching Clean Power Plan raise concerns about replacement

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