comtech

March 2014

Dustin TrippRegulatory Update

On January 8, 2014 the U.S. Environmental Protection Agency (EPA) published proposed rules on carbon emissions in the Federal Register that would, as a practical matter, eliminate coal as a fuel source for new power plants.  More importantly, these rules on new power plants trigger a legal requirement under the Clean Air Act to set new standards for existing power plants which will have a direct economic impact on cooperatives and their members.  These rules could result in substantially higher generation costs which will lead to significantly higher energy bills.

The proposed rule would require any new coal-fired generating facility to implement a technology known as carbon capture and storage (CCS).  Unfortunately, this technology is not proven on a utility scale plant and is certainly not cost effective.  Numerous studies reveal that the cost of the CCS technology will be prohibitive.  Cost estimates vary widely depending upon the type of power plant, the stage of carbon capture, the type of transport system and storage type.  Given these variables, studies have revealed that the implementation of CCS technology would increase the cost of energy from a coal-fired power plant in the range of 60 to 85%.  In addition, the additional equipment required to perform the CCS technology would decrease the plants efficiency by as much as 20 to 40%.  The EPA did not follow the historical standard that requires a technology to be cost-effective which will certainly lead to a court challenge that may take years to complete.

Given the proposed standards by the EPA, it certainly appears they are trying to remove coal as a fuel source for generating electricity.  Removing coal as a fuel source for generating electricity will be detrimental to our economy and specifically, the economy in Southern Illinois.  In addition, removing coal as a fuel source for future plants will lead to an over reliance on natural gas as a fuel source and at some time in the near future, even higher electricity prices due to higher natural gas prices. 

The proposed rules currently apply to future coal and natural gas generation facilities.  However, the U.S. EPA is also scheduled to release proposed carbon pollution standards for existing coal and natural gas generation facilities in June 2014 which could impact over 65% of our nation’s current energy supply and increase the cost of generating electricity.

The EPA is currently receiving public comments and I urge you to let the EPA know that you support a reasonable energy policy and urge them to pursue fair, affordable and achievable solutions to keep electricity affordable.  Please visit the Cooperative Action Network site at www.action.coop to share your comments and learn more about the EPA’s proposal.  We have also included a link to this website on the front page of the SEIEC website at www.seiec.com.  It only takes a few minutes to let your voice be heard.  Thank you for helping in our efforts to keep your electricity affordable.

 

See you next month and as always, "We'll keep the lights on for you."