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Supreme Court short-circuits Clean Power Plan

Last December, I let you know that America’s electric cooperatives were filing suit against the Environmental Protection Agency (EPA), asking a federal court to prevent a rule called the Clean Power Plan from taking effect. The National Rural Electric Cooperative Association (NRECA) and 39 generation and transmission co-ops asked the U.S. Court of Appeals for the D.C. Circuit to intervene and recognize the lack of legal authority behind the EPA’s regulation. Tennessee’s electric cooperatives were part of this effort.

The Court of Appeals denied our request for a stay. But on Feb. 9, the Supreme Court took the unusual step of blocking the EPA’s landmark carbon rule for power plants, throwing into doubt whether President Barack Obama’s signature climate-change initiative will survive a legal battle before the high court.

The decision read, in part, “The application for a stay submitted to The Chief Justice and by him referred to the Court is granted. The Environmental Protection Agency’s ‘Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,’ 80 Fed. Reg. 64,662 (October 23, 2015), is stayed pending disposition of the applicants’ petitions for review in the United States Court of Appeals for the District of Columbia Circuit.”

The Tennessee Electric Cooperative Association is very pleased with this decision halting implementation of the EPA’s Clean Power Plan. If this stay had not been granted, cooperatives across the nation would have been forced to take costly and irreversible steps to comply with the rule.

From its inception, we have believed this rule is unneeded regulatory overreach. Our initial step was to provide real-life concerns about the impacts of the proposed rule. More than 1 million Americans joined our push, agreeing that the EPA’s actions jeopardize rural America’s supply of safe, affordable and reliable electricity.

These regulatory hurdles make it increasingly difficult to deliver power to you. We are committed to a cleaner energy future. But the Clean Power Plan goes far beyond what the Clean Air Act authorizes the EPA to do and could seriously challenge our nation’s electric system. We continue to believe this is a huge overreach of EPA’s legal authority.

Low rates and reliable power must be part of our clean-energy future. This decision opens the door to find real solutions that effectively balance environmental and economic concerns. Cooperative members hardest hit by new regulations will be those who can least afford to pay more to keep the lights on — those living on fixed incomes or in poverty.

What’s next?

The decision does not address the merits of the lawsuit. The ruling from the highest court in the land puts the rule on hold until the case is argued in court. The stay is no guarantee that the rule will eventually be struck down, but the development is a bad omen for EPA’s chances. It does indicate that the court believes the states, utilities and coal companies have raised serious questions.

It also means that the deadlines imposed by the EPA will have to be revised. The D.C. Circuit Court of Appeals put the case on a fast track: Oral arguments are scheduled for this June, and that court’s decision could come in late summer or fall. Depending on the result, a Supreme Court appeal could come in early 2017.

As developments proceed, we’ll keep you informed.

Three keys to understanding the EPA plan on climate change

The U.S. is in the process of taking a giant step in the noisy process of changing how we generate and use electricity now that the Environmental Protection Agency has released the final version of its Clean Power Plan.

That contentious process will continue for years, or even decades, as advocates warn of nothing less than destruction of the economy on the one side and the destruction of the planet on the other.

This current energy focus is the result of President Obama’s August 3 announcement of what he called, “A plan two years in the making, and the single most important step America has ever taken in the fight against global climate change.”

Two days after that announcement, 16 states asked the EPA to put a hold on the plan, calling it illegal and saying it would raise utility bills.

The plan would reduce the burning of coal to produce electricity, which now generates more than one-third of our electric power, and increase the use of renewable energy sources like solar and wind. The huge effects of those changes, and the complex and controversial ways they would happen, guarantee that the Clean Power Plan will be setting the nation’s energy discussion for the foreseeable future.

Here are the key things to know about the EPA Clean Power Plan:

Over the next 15 years, the plan would change the U.S. energy economy

The Clean Power Plan targets the 1,000 fossil fuel-burning electric power plants in the U.S., aiming to cut carbon dioxide emissions by one-third.

The Plan also sets out a way for that to happen. It calls for states to work with the power industry and submit a carbon dioxide emission reduction plan to the federal government by September, 2016. A two-year extension can be requested. Reductions would begin in 2022 and would be completed by 2030.

To replace fossil fuels, the Clean Power Plan encourages renewable energy.

Opposition could delay the plan

The 16-state request for a delay actually seeks to kill the Clean Power Plan. The request, in the form of an August 5 letter to the EPA, says that the agency should hold off on implementing the plan because of the states’ intention to sue the EPA.

The planned lawsuit would claim that the law the EPA is using as a basis for the Clean Power Plan, the Clean Air Act, does not allow the EPA to require states to make such large-scale changes to their energy economies.

The EPA says the Clean Power Plan has been carefully written to comply with the law. The August 5 letter cites other objections to the Clean Power Plan, including that it would “coerce states to expend enormous public resources and to … prepare State Plans of unprecedented scope and complexity. In addition, the State’s citizens will be forced to pay higher energy bills as power plants shut down.”

Additional lawsuits are expected from other opponents.

There is also strong political opposition. Elected officials in Congress as well as state governments have called on states to refuse to submit carbon reduction plans.

Electric co-ops say plan would raise electric bills, hurt rural economy

Electric co-ops cite special concerns about the effects of the Clean Power Plan because of their higher share of low-income members and often already-fragile rural economies.

The National Rural Electric Cooperative Association warned of the expected increase in electric bills as a result of power-plant closures.

“Any increase in the cost of electricity most dramatically impact those who can least afford it,” said NRECA. “The fallout from EPA’s rule will cascade across the nation for years to come.”

Paul Wesslund writes on cooperative issues for the National Rural Electric Cooperative Association, the Arlington, Va.-based service arm of the nation’s 900-plus consumer-owned, not-for-profit electric cooperatives.

Statement on Clean Power Plan

NASHVILLE, Aug. 3, 2015 – The Tennessee Electric Cooperative Association, an organization representing Tennessee’s not-for-profit, member-owned electric cooperatives and the more than 1.1 million homes, farms and businesses they serve, made the following statement about the Environmental Protection Agency’s final Clean Power Plan rule.

“We are disappointed that the EPA continues to ignore the burden these regulations will have on Tennessee families and businesses,” says David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “We will continue to advocate for a solution that strikes a balance between a healthy environment and a healthy economy.”

“The EPA rule fails to consider the impact to electric rates and reliability. That’s a risky move,” says Callis. “Affordable and reliable energy is critical to Tennessee’s economy, and any regulation that overlooks that fact is incomplete and ill–advised.”

“The modifications to the Clean Power Plan accelerate the pace of emissions reductions and discounts the efforts that have already been made,” says Callis.

In 2014 Tennessee’s electric cooperatives coordinated a grassroots campaign calling on the EPA to ensure that affordable and reliable energy was protected. More than 14,000 electric consumers in Tennessee responded during the EPA’s comment period on the Clean Power Plan.

The Tennessee Electric Cooperative Association provides legislative and communication support for Tennessee’s 23 electric cooperatives and publishes The Tennessee Magazine, the state’s most widely circulated periodical. Visit tnelectric.org or tnmagazine.org to learn more.

UPDATE – TECA has learned that the EPA will allow TVA to count new generation from Watts Bar nuclear plant toward state CO2 emission reduction requirements. TECA and NRECA will continue to monitor the plan and evaluate the impact it will have on Tennessee co-op members.

 

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Contact:
Trent Scott | Director of Corporate Strategy | tscott@tnelectric.org | 731.608.1519

14,000 comments sent to the EPA

NASHVILLE, Dec. 1, 2014 – Electric consumers from across Tennessee submitted more than 14,000 comments to the Environmental Protection Agency (EPA) in opposition to the agency’s proposals to limit carbon dioxide emissions from power plants. The final EPA comment period closed Monday, Dec. 1.

“Tennessee’s electric cooperatives believe that low rates and reliable power must be a part of our clean energy future,” said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “Unfortunately, the EPA didn’t consider the real-world impact this latest proposal will have on the cost and reliability of energy for families and businesses. That’s why thousands of Tennesseans told the EPA they couldn’t afford another all-pain-for-no-gain government regulation. It’s possible to balance affordability and environmental stewardship, but not under these latest rules.”

Comments were collected online at takeactionTN.com and from cards distributed by local electric cooperatives. These comments are also being submitted to the Tennessee Valley Authority as a part of TVA’s Integrated Resource Planning process that determines how the agency will generate energy in the future.

These 14,000 comments were part of a nation-wide effort by electric cooperatives that collectively submitted more than 1.1 million comments to the EPA opposing new regulations for new and existing power plants.

You can learn more about the impact of these regulations and get involved at tnelectric.org/takeaction.

About TECA

The Tennessee Electric Cooperative Association is a trade group representing the interests of Tennessee’s 23 electric distribution cooperatives and the more than 2 million consumers they serve. The association publishes The Tennessee Magazine and provides legislative and support services to Tennessee’s electric cooperatives. Learn more at tnelectric.org.

 

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Contact:
Trent Scott | Director of Corporate Strategy
tscott@tnelectric.org | 731.608.1519

One million comments

America’s electric cooperatives have collected one million comments in opposition to the EPA’s proposed rule targeting existing power plants. This milestone boosts our relevance in the nation’s capital and sends a powerful message to EPA officials.

Our drive to one million has not been a simple task, and it would not have been possible without the support of co-op members.

“This has been a concentrated effort to protect our members from expensive and ineffective government regulations,” says David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “I thank everyone who has helped us take a stand for affordable and reliable energy.”

While reaching this milestone is cause for celebration, now is not the time to take a break.  There’s still more time to grow the number of comments that we’ll send on this proposal. Because the EPA recently extended the comment deadline to December 1, there’s now an additional 45 days for all of us to encourage more people to make their voices heard.

You can submit your own comments to the EPA by visiting takeactionTN.com.

EPA grants comment extension

The EPA announced on Tuesday that it will grant a 45 day extension to the comment period for its climate rule on existing power plants.

The announcement of a new Dec. 1 deadline comes after more than half of the Senate asked the EPA to extend the comment period for another 60 days. Both Sens. Alexander and Corker signed the letter sent to EPA administrator Gina McCarthy last week.

“The EPA’s proposed regulation will have significant impacts on the affordability and reliability of power and poses a threat to American jobs and the economy,” says David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “We applaud the EPA’s decision to extend the comment period, we thank Senators Alexander and Corker for their support on this issue, and we encourage all Tennesseans to visit takeactionTN.com to send your own message to the EPA.”

Learn more about this issue at tnelectric.org/takeaction.

Impacts

By David Callis, executive vice president and general manager

While there are usually two sides to every story, quite often there are even more. That makes decision-making difficult, whether it’s parenting, voting or solving complex business decisions. If you’ve ever separated quarreling siblings, you know it’s no simple task discovering who instigated the fight. You listen to both parties, check the facts and dispense justice — or something close to it.

The Environmental Protection Agency (EPA) recently introduced its Clean Power Plan, which would essentially restructure the way electricity is generated — local decisions would be made in Washington, D.C. As the EPA unveiled the proposed rule, it also quoted statistics stating that the cost of electricity would be lower in 2030 if the rule were adopted.

If you only consider the information the EPA provided, you wouldn’t really understand why anyone would oppose a plan that purports to lower your electric bill and fight climate change.

That is unless, of course, you looked at another side of the issue.

Everyone wants clean air; that should go without saying. Over the past decades, electric cooperatives across the nation have invested billions of dollars in emissions technologies and renewable energy sources. We’ve also led the way in energy-efficiency efforts; what other industry pays you to use less of its product?

Closer to home, the Tennessee Valley Authority closed several aging coal plants, switched fuels to natural gas whenever possible and continued to build carbon-emission-free nuclear generation. All of these measures have been cost-effective, systematic and done without federal mandates. (TVA is a federal agency, but operating decisions are made locally.)

The EPA’s rule essentially eliminates coal as a generation source. To the EPA and proponents of the rule, that’s great. Yet, there is another side to the “war on coal.”

At a recent EPA hearing in Denver, Moffat County (Colorado) Commissioner John Kinkaid shared the impact coal has on his county. He began by discussing the natural beauty of his county and the tourism and recreational options available.

And then he discussed the financial impact of the EPA rule. The coal mines and power plants are the largest taxpayers in the county, providing an annual financial impact of more than $428 million to the local economy. This comes from the very same coal-fired plant that co-exists with the residents and the mountains.

Residents of the county don’t want it closed. They don’t want local residents to lose good jobs. They don’t want their school systems to struggle for funding. They want to control their destiny, making the decisions that impact their future.

Opposition to EPA’s Clean Power Plan doesn’t mean that we only support coal, and it certainly doesn’t mean that we oppose clean air. However, the plan’s impact on the U.S. economy is far too great without making any significant impact on reducing global carbon emissions.

Moffat County is only one of many areas impacted by the plan. Tens of thousands of families could see their lives upended for a rule that, on its face, looks like a good idea.

As we’ve mentioned, the EPA is taking comments on the Clean Power Plan proposed rule until Thursday, Oct. 16. EPA officials asked for comments, so let’s give them comments. Go to takeactionTN.com and let your voice be heard.

Prevailing winds

By David Callis, executive vice-president, Tennessee Electric Cooperative Association

Despite a few high-profile scandals, I like to believe that most corporations abide by the law. Some do so because it’s the right thing to do. Others do so because of existing regulations and laws.

Along those lines, how do electric utilities respond when regulatory bodies force operational changes? If federal energy policy enacts changes that alter your strategy, sound business practice demands that you comply. Obeying the law ensures continued operation; doing the opposite invites fines, failure or possibly even incarceration.

It’s not an unusual happening in the energy industry. Our government is empowered to ensure that the economy functions well, and sound energy policy keeps the engine of industry running. Over the years, the federal government has taken action in a variety of ways: establishing and maintaining a Strategic Petroleum Reserve, restricting exports of fuels that are in short supply and even mandating that certain fuel sources be avoided.

That last point is a troubling one. Successful businesses plan for the future, doing their best to anticipate changing economic and market conditions. Most businesses plan strategically for the next two to three years; others take longer looks, three to five years and beyond, depending on their forecasting ability. In the electric utility business, routine planning for us means that we plan 20 to 30 years into the future.

The electric utility business is a very capital-intensive business. That simply means it costs a lot of money to build large electric generating plants and transformers and string wire. When you are constructing and maintaining a costly infrastructure, it requires meticulous long-term planning.

That’s particularly true for utilities such as the Tennessee Valley Authority that build facilities that generate electricity. In planning for the needs of our state and the surrounding area, TVA is currently in the midst of doing just that. Its Integrated Resource Plan (IRP) will be completed later this year.

Exploring the capital-intensive nature of our business, if a utility in, say, 1974, was planning for a 30-year future, one decision is what fuel to use. It needs to be a source that is abundantly available. The utility would make the best economic choice, taking into consideration the cost of the fuel, pollution standards and safety concerns.

What if one of those sources was taken off the table by regulators?

Around 1974, the 94th Congress passed S. 622, better known as the Energy Policy and Conservation Act. The law was signed by President Gerald Ford on Dec. 22, 1975. The official summary of the act reads: “Extends through June 30, 1977, the authority of the Administrator of the Federal Energy Administration under the Energy Supply and Environmental Coordination Act to issue orders prohibiting power plants and major fuel burning installations from using natural gas or petroleum products as fuel if they had been capable on June 22, 1974, of burning coal.” (emphasis mine)

The message delivered in 1975 was that burning natural gas is bad and burning coal is good. That’s a bit different than what we’re facing in 2014.

There were sound reasons for the decisions made in 1975, yet those decisions had consequences. We have a significant amount of coal-fired generation in this country that will be costly and difficult to replace.

Congressional action typically involves a thorough, deliberative process when setting energy policy. However, policy dictated by an agency without that process is subject to far less scrutiny.

As we’ve told you before, you have an opportunity to let your voice be heard. The Environmental Protection Agency is taking comments on its proposed Clean Power Plan until Oct. 16. TVA continues to invite comments on its IRP until Nov. 25.

Go to takeactionTN.com today and send a message. We need sensible solutions that provide for affordable and reliable power.

Short start to a long process

By Mike Knotts, director of government affairs, Tennessee Electric Cooperative Association

Over the past year, you may have read in these pages about your local electric cooperative’s concerns about government regulations and how those regulations might affect electricity generation at new power plants that might need to be built to keep our homes cool and power our modern economy. Many of you have expressed your agreement or disagreement with my words — sometimes in colorful language — and I am appreciative of the feedback you have provided me.

Regardless of where we all may fall on the political spectrum, I think we can agree that our modern society demands a constant supply of reliable and affordable electric energy. Our world simply wouldn’t be the same without it. And the fine folks at your local co-op, for whom I work, are where “the rubber meets the road” on these important issues. It is serious and complex work.

In what is probably the most significant regulation ever proposed by an agency of the United States government, the U.S. Environmental Protection Agency (EPA) recently released a proposed rule that would limit the emissions of carbon dioxide from existing, rather than new, power plants all across America. These rules are far-reaching and unique. And since you own your co-op, you will be impacted in some way.

What the rule does

The Obama administration had previously proposed a national goal of reducing carbon emissions by 30 percent below 2005 levels by 2030. Instead of an across-the-board reduction, however, the proposed rule sets state-specific goals and creates guidelines to be used in making proposed methods to meet those goals. After approval of the rule, state governments will be required to develop detailed implementation plans that will determine what specific actions are taken to achieve the required reductions in carbon emissions. EPA will have the ability to approve or disapprove those plans.

Sources: Goals from “Clean Power Plan Proposed Rule” (p. 346-8); 2012 Emissions Rate from “Goal Computation Technical Support Document” (p. 25-6)

Sources: Goals from “Clean Power Plan Proposed Rule” (p. 346-8); 2012 Emissions Rate from “Goal Computation Technical Support Document” (p. 25-6)

There are significant differences in the requirements placed upon the states. Washington state, for instance, will be required to reduce its carbon emission rate by 76 percent while North Dakota will only be required to reduce its rate by 11 percent. Tennessee’s required reduction will be 39 percent, ranking 13th on the list of most impacted states. The accompanying chart shows the three most- and least-affected states as well as the required reductions for Tennessee and our neighboring states. It is unclear how states will be able to develop plans when a particular power plant serves customers in several states or is owned by the federal government instead of private company, as is the case for every power plant here in Tennessee.

How the rule works

Because of the nature of the rule, the nuts and bolts of what must be done to achieve the goals set by EPA won’t be clear for some time — possibly as far out as 2016. EPA set the state-by-state goals by developing a “best system of emission reductions,” and there are thousands of pages of technical details that accompany the rule and detail how these goals were set. At the time this article was authored, those details are still being evaluated, page by page. States will have several years to submit their plans to EPA for approval, and that is the point in time when the tough decisions will have to be made.

We do know, however, that this rule will force a significant number of coal-fired power plants to shut down or convert to using natural gas as fuel. We know that the rule encourages states or groups of states to implement a cap-and-trade model of carbon emission allocations. We know that in order to comply, actions will be required that are “outside the fence” of a power plant — actions like requiring utilities to implement energy-efficiency or demand-management programs. We also know that new nuclear generation will help states achieve their goals, as nuclear power does not emit any carbon into the atmosphere.

What can I do?

While it will be many years before the full scope of this plan could be implemented, there is short window of time in which the EPA will be actively soliciting comments from the public about the proposed rule. Starting with the day the rule is published in the Federal Register, there will be a 120-day comment period. As you become more educated about this rule, make your voice heard by visiting takeactionTN.com and submitting a comment to the EPA about your thoughts.

Tennessee among states hardest hit by EPA regulations

Tennessee’s electric cooperatives call for consumers to take action.

NASHVILLE – Tennessee’s electric cooperatives express concern following the release of the U.S. Environmental Protection Agency’s proposed guidelines that will limit emissions from thousands of existing power plants, including 11 coal plants operated by the Tennessee Valley Authority.

“Estimates indicate that Tennessee will be among the hardest hit by the state requirements, calling for a 38 percent reduction in carbon dioxide emissions by 2030,” says David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “These regulations will hurt Tennessee families, and we are just beginning to understand how severe the impacts will be.”

Tennessee has already taken significant steps to improve energy efficiency and reduce carbon emissions. “The average monthly residential energy use in Tennessee has fallen 16 percent since 2010, and TVA has reduced its carbon emissions by 30 percent since 2005,” says Callis.

“It is important that we make our voices heard. Affordable energy and a strong Tennessee economy depend on an all-of-the-above approach to energy generation.”

The EPA will hold a 120-day public comment period, and you can submit your comments to the EPA by visiting takeactionTN.com.

“The economic challenges faced by many cooperative members make it critical that EPA regulatory programs be cost effective and provide environmental benefits that exceed the implementation and compliance costs,” says Callis.

The Tennessee Electric Cooperative Association is a trade group representing the interests of Tennessee’s 23 electric distribution cooperatives and the 1.1 million rural and suburban consumers they serve. The association publishes The Tennessee Magazine and provides legislative and support services to Tennessee’s electric cooperatives. Learn more at tnelectric.org.

 

Contact:
Trent Scott | tscott@tnelectric.org | 731.608.1519