Power Companies Respond Positively to EPA's Final Carbon Pollution Standards

This blog was co-authored with Montina Cole

This week the U.S. Environmental Protection Agency (EPA) released a historic plan to reduce carbon pollution from the power sector, and power companies across the country are responding positively to this new initiative that will help protect public health and the environment by reducing the greenhouse gases that fuel climate change. Building on continually emerging clean energy innovations and a modernizing shift already underway in the electric utility sector, the EPA's final Clean Power Plan (CPP) sets pollution limits for power plants and empowers states to deploy strategies of their choosing to cut carbon emissions from those plants. The power sector is the single biggest source of carbon pollution in the nation and the Clean Power Plan introduces the first-ever national limits on emissions of carbon dioxide from power plants.

Power company responses to the Clean Power Plan shortly after the rule's release indicate broad support across the industry for EPA's final carbon emission guidelines and the benefits the rule will bring. And even as several companies continue to review the final rule's details, many preliminary reactions have been favorable, acknowledge the importance of reducing greenhouse gases, or indicate readiness to work collaboratively in the states as plans are developed and the rule is implemented. Companies from both the private and public sectors of the industry are voicing their opinion.

Here is a sampling of what individual power companies are saying about the final Clean Power Plan:

• "The Environmental Protection Agency's (EPA's) release of the Clean Power Plan represents a seminal moment for the power generation industry. Based on statements by President Obama and the EPA, it appears the plan mandates significant but achievable CO2 emissions reductions while giving the states broad discretion in how to achieve those goals. Specifically, the plan provides a framework that will allow states to adopt a market-based approach to achieving reductions, easing the states' burden while allowing market economics to decide the best mix of generation resources to achieve the goal. Importantly, these emissions reductions will be realized in a manner that ensures continued affordable and reliable electricity. Calpine Corporation (NYSE:CPN) believes the plan, as broadly described, is a workable and achievable approach to control CO2 emissions that will benefit generations to come." (Calpine)
• "Iberdrola USA commends the Obama administration for taking action to curb CO2 emissions from electric generation facilities," said Bob Kump, chief corporate officer for Iberdrola USA. "The EPA's Clean Power Plan affirms that renewable energy must play an important role in reducing our greenhouse gas emissions, while recognizing that we can reliably and efficiently increase our use of wind, solar, and other renewable resources. Importantly, the plan provides states the flexibility they need to adopt solutions consistent with their unique conditions and resources. Moreover, the plan has the necessary provisions giving states and utilities time to develop new transmission facilities and other infrastructure essential to support the transition to the next generation of energy resources. We also appreciate that the EPA has ensured the rule will not impair the reliable service utilities provide our customers every day." (Iberdrola)
• "Ralph Izzo, president, chairman and CEO OF PSEG, [New Jersey's] largest electric utility, said the company is still analyzing the plan, but that PSEG supports it. 'We are pleased with the recognition that energy efficiency is an important tool to reducing greenhouse gases,' he said in a statement. 'We understand states may be incentivized to promote energy efficiency for low-income customers as an early tool to reduce greenhouse gases. We believe utilities can play a critical role in making sure that all energy users -- especially low and moderate income customers who need it most -- have access to energy efficiency.'" (PSEG)
• "We at CPS Energy have been on a steady path to diversify and reduce the carbon output of our generation fleet. With the best market structure, low energy costs, and vast renewable and natural gas resources, Texas is uniquely positioned. After final resolution of the Clean Power Plan, we look forward to working with the state to continue taking a leadership role in carbon reduction." (CPS Energy)
• Dominion will work constructively with Governor McAuliffe, the state agencies, and other stakeholders on a compliance plan that has our customers as the first priority, ensures reliability, and maintains a diverse mix of electric generation. I commend Administrator McCarthy for making critical changes to the proposed rule." (Dominion Resources)
• "'This landmark, comprehensive regulation will enable real progress in significantly reducing greenhouse gases,' said National Grid US president Dean Seavers. 'The Obama Administration and EPA, under the leadership of Gina McCarthy, have worked tirelessly to craft a regulation that promotes the protection of human health and the environment through a host of clean energy options. This new rule supports market-based solutions while giving the states options to flex them to address their specific characteristics.' . . . 'National Grid will be actively collaborating with the states and other stakeholders as they develop their implementation plans to ensure the reduction of greenhouse gas emissions from the energy sector and advance America's efficient and clean energy future.' (National Grid)
• "'There is no question that today's announcement is positive for renewables and it will be positive in the long term for the renewable business at NextEra.'" (NextEra)
• "It is expected that this first-ever national program to reduce greenhouse gas emissions from the power sector will advance investments in clean energy technologies throughout the country and provide tremendous environmental benefit. . . . Tony Earley, Chairman, CEO and President of PGE Corporation, commented on the release of the final rule saying, 'I congratulate the Administration on finalizing the Clean Power Plan rule and greatly appreciate the significant outreach and engagement with our sector. They took the time to understand that states and regions are in different starting places and have different opportunities for achieving emission reductions.'" (PG&E)
• "This ambitious plan seeks to build on the substantial progress Duke Energy and other utilities have made to reduce our environmental footprint. . . . As we continue to move to a lower carbon future, we will also continue to work constructively with states to identify customer solutions that preserve the reliability and affordability that our communities expect." (Duke Energy)
• "Skiles Boyd, DTE's vice president of environmental management and resources, said the Detroit-based power company is positioned to meet the EPA's new carbon regulations.' . . . 'We appreciate that the EPA recognized providing utilities with some additional time to meet the first compliance deadline would benefit customers and cushion the economic impact while still achieving the targeted environmental benefits.' (DTE)
• "[T]he Jackson-based utility is prepared to meet the carbon emissions targets in the EPA's revised Clean Power Plan. . . . [T]he company will work with state and federal regulators to comply with future regulations." (Consumers Energy)
• "'It appears from our initial analysis that the EPA has responded constructively to the coordinated outreach from Arizona elected officials, regulators, utilities and other stakeholders regarding Arizona's plan.' (Tucson Electric Power Company)
• "The Clean Power Plan is a rule that will move the nation forward with national climate goals. We applaud that. . . . We look forward to working with state authorities and other utilities as we understand and adapt to this new Plan." (Austin Energy)
• "'Westar has been supportive from the beginning of putting together a state implementation plan,' Westar spokeswoman Gina Penzig said. 'We think that ... a common-sense Kansas approach would be a better solution than to wait and see what implementation plan the federal government might come up with.' (Westar Energy)
• "'It's time to regulate CO2 emissions from power plants -- it is definitely time,' said Eric Olsen, vice president and general counsel for Great River. 'This rule may not be the best rule, but we've already been sitting down with Minnesota and North Dakota officials to talk.'" (Great River Energy)
• MidAmerican said it doesn't "anticipate that the [CPP] will have a significant impact on our customer rates," given the company's growing investment in wind energy. MidAmerican's CEO Bill Fehrman last week said the Des Moines-based company expected to get 57 percent of its energy from wind after adding 552 megawatts of wind energy. (MidAmerican/Berkshire Hathaway Energy)
• "'While we expect the Clean Power Plan does not provide everything we hoped for in terms of fully recognizing the early actions of proactive states and utilities, Xcel Energy is ready to move ahead. We look forward to working with our states in the best interest of our customers, ensuring we continue to meet their expectations for clean, reliable and affordable power.'" (Xcel)
• "While we are still reviewing the details of the plan, we are confident that the final rule provides the states the flexibility needed to design their program implementation to address state specific characteristics and impacts. Seattle City Light looks forward to working with Washington State and other stakeholders as we develop a strong and effective state implementation plan." (Seattle City Light)
• "LADWP applauds US EPA's release of its final Clean Power Plan which will limit carbon emissions from power plants. As the nation's largest municipal utility, LADWP is in the midst of a historic transformation of its electric power system to eliminate burning coal to produce electricity, while increasingly investing in energy efficiency, locally generated solar, and other renewable energy sources. . . . LADWP looks forward to working with US EPA and the California Air Resources Board as they implement the final Clean Power Plan." (Los Angeles Department of Water and Power)

Edison Electric Institute, which represents almost all the investor owned utilities in the U.S. said:

"Throughout this rulemaking process, EEI raised a number of issues, and EPA seems to have responded to some of our key concerns. While we are still reviewing and analyzing the rule's specifics and the impact of the restructured interim goals, the final guidelines appear to contain a range of tools to maintain reliability and better reflect how the interconnected power system operates."

"We appreciate EPA's significant outreach over the past year. Given the length and complexity of this rule -- and the many stakeholders it affects -- challenges will remain. EEI and its member companies will continue to work with the states as they develop plans that meet their state energy needs.

"Today utilities are focused on the transition to a cleaner generating fleet. In 2014, utilities reduced carbon dioxide emissions by 15 percent below 2005 levels, and nearly one-third of U.S. power generation came from zero-emissions sources--nuclear and renewables." (EEI)

The power sector will play a vital role as states work with stakeholders to develop compliance plans to achieve the pollution limits for power plants. As attention now turns to this important work in the states, indications are that power companies stand ready to work with the states to meet the climate challenge.