WASHINGTON – In its strongest measure yet to combat climate change, the Obama administration Monday proposed new rules that would dramatically cut carbon emissions from the nation’s power plants. It’s a move that could make for a costly transition for the coal-dependent Midwest while leaving New York with an advantage from its early shift away from the dirtiest fossil fuel.
Under the Environmental Protection Agency’s proposal, coal-fired power plants would have to cut their carbon dioxide emissions by 30 percent, compared with 2005 levels, by 2030.
Energy industry sources said that would, in effect, require many older coal-fired plants in the Midwest to convert to cleaner natural gas or go out of business. But the new rules could inadvertently benefit states such as New York, which historically has relied on other ways of producing electricity and which has already made strides in reducing carbon emissions through a regional compact.
New York still has six coal-fired plants, but two – including NRG Energy’s facility in Dunkirk – are already set to convert to natural gas, which emits significantly less carbon dioxide than coal does. However, the existing coal-fired facilities in the state – including NRG’s Huntley station in the Town of Tonawanda and the former AES facility in Somerset – may be endangered by the new EPA rules.
That hard fact is likely to be overshadowed by New York’s advantage: comparatively plentiful nuclear and hydroelectric power, and a head start toward reducing carbon emissions under the Regional Greenhouse Gas initiative, a compact with eight other Northeastern states to reduce carbon emissions from the power industry.
“Because of the fuels that we use that have lower CO2 emissions, we’re in a better position than those other states,” said Darren Suarez, director of governmental affairs for the Business Council of New York State.
States that still rely heavily on coal-fired plants – such as Pennsylvania, Ohio, Indiana, Michigan and Kentucky – can expect higher electricity prices in the years to come as utilities make the costly transition away from coal, most likely to natural gas.
“Those are the places that can expect to have a disproportional impact,” said Ross E. Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers, which sharply criticized the proposed new rules.
Those states don’t belong to the Regional Greenhouse Gas Initiative, an effort in which New York and eight other states agreed to cap carbon emissions starting this year and impose lower limits every year through 2020.
Utilities in the participating states are already under pressure to reduce carbon emissions, noted Suarez, who speculated that other states may want to join the regional effort to cut greenhouse gases in order to get a head start on complying with the new federal rules.
A critic of those rules, Rep. Chris Collins, R-Clarence, acknowledged that they would likely lead to higher energy prices in nearby states – meaning that the rates there would creep closer to those in New York, which, according to the U.S. Energy Information Agency, remain the nation’s highest except for Hawaii. But Collins said the proposed rules, which the Obama administration is pursuing under its executive authority, could hurt the U.S. economy overall.
“My goal isn’t to make everyone else less competitive so New York does better relatively as hundreds of thousands of jobs go out of this country to China and other lower cost countries,” Collins said. “We need to get the entire country growing.”
There’s also the issue of the two remaining coal-fired power plants in Western New York, which both now serve as backups to the state power grid, producing electricity in high-demand times such as last winter while remaining dormant at other times.
In a statement, NRG said it agreed that greenhouse gases must be reduced. But the company added: “Based on our initial reading of the EPA’s proposed GHG rule for existing power plants, we have concerns that EPA’s dramatically varying state emission targets may derail these objectives by adversely impacting electricity reliability and consumers in certain states and introducing excessive uncertainty and legal risk.”
A source with intimate knowledge of the local energy market said the Huntley plant might be more likely to covert to natural gas than the Somerset facility, given that the Huntley plant is located much closer to existing natural gas lines.
Jerry Goodenough, chief operating officer of Upstate New York Power Producers, which owns the Somerset plant, said the company had not yet had the time to assess the impact the EPA proposal might have on the Niagara County facility.
But Collins, whose district includes the Somerset plant, said the new emissions rules would likely force the facility to install tens if not hundreds of millions of dollars worth of anti-pollution equipment, even though a previous round of improvements made the Somerset plant one of the cleanest coal-fired power plants in the country.
Announcing the new rules Monday, EPA Administrator Gina McCarthy portrayed them as a necessary step toward controlling climate change by – for the first time – regulating carbon emissions from the nation’s single largest carbon producer.
“By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids,” she said.
The EPA proposal kicks off a public comment period, and after that, the agency expects to finalize the new rules in mid-2015. States will then have a year to design their own plans for implementing the new federal rules.
Not unexpectedly, the proposal met harsh criticism from manufacturers and allies of the coal industry.
Jay Timmons, president of the National Association of Manufacturers, called the new rules “a direct threat to American manufacturing’s competitiveness.”
And Rep. Shelley Moore Capito, a West Virginia Republican running for an open Senate seat, called the new regulations “coal-crushing.”
“The EPA should come to Danville, W.Va., where I was this morning and hear the struggles the people from the coal community shared,” Capito tweeted.
Yet several power utilities expressed support for the proposal, as did most environmentalist groups.”“This is an important first step to achieving meaningful reductions in greenhouse gases,” said Edward H. White, vice president of U.S. consumer and business strategy at National Grid, which supplies power to much of the Buffalo area.
White praised the plan for giving the states the ability to devise their own ways of meeting the emissions targets, as did Marcia Bystryn, president of the New York League of Conservation Voters.
Bystryn said the plan would help the nation confront the climate change that many communities are already experiencing.
“This is the biggest step we’ve ever taken for the biggest challenge we’ve ever faced,” she said. “The American people support these common-sense safeguards and are sick of the lie that pollution has to be the fuel of our economic engine.”