New Pollution Rules Leave Utilities Frustrated, As Details Remain Up In Air

The Obama administration has proposed rules for limiting greenhouse gases, but many of the details must still be set by states, leaving utilities unsure about specifics they'll be expected to achieve.

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The White House's release earlier this week of a sweeping, though preliminary, plan to sharply reduce carbon emissions has the utility industry asking some questions - questions, like what's it going to cost us? What's it going to cost our customers? And how are we going to meet the targets? As NPR's John Ydstie reports, the unveiling of the plan produced some relief among utility companies, but also a lot of skepticism.

JOHN YDSTIE, BYLINE: The nation's electric utilities are responsible for about a-third of the greenhouse gases produced in the United States. The EPA's proposed rule calls on them to cut their carbon emission levels by 30 percent overall. Before Monday's announcement, one big question and concern from the utilities had been just what the baseline year would be. The EPA decided it would be 2005, the baseline year in President Obama's failed Climate Change legislation. That's just the baseline year that utilities like PPL, headquartered in Allentown, Pennsylvania, had hoped for. George Lewis is PPL's spokesman.

GEORGE LEWIS: We believe that it's important for EPA to give credits to companies and to states that have already taken actions, as we have, to try to address greenhouse gas emissions.

YDSTIE: Since 2005, U.S. utilities have cut their carbon dioxide output by around 15 percent - so it appears they are about halfway to the EPA's goal, though the progress has been uneven across states and utilities. In addition, the EPA has assigned each state different goals - some must show carbon emission cuts of more than 30 percent and some less. The agency has given them flexibility to reach those goals. They can use things like Cap and Trade programs, conservation programs and support for renewables, for instance. Utilities generally like that flexibility. But Nick Akins, CEO of American Electric Power, says it does make assessing the impact on each utility more complicated.

NICK AKINS: We still have to look in details of what these state numbers actually mean. So I'd say the verdict is still out whether, you know, whether this is extremely more aggressive or is it moderate enough to where, you know, the industry can respond?

YDSTIE: AEP has already reduced its carbon emissions by more than 20 percent since 2005. It's concerned that some states it operates in will have to cut emissions more than 30 percent by 2030. That could put more pressure on the utility to make deeper cuts. For instance, EPA wants Louisiana, where AEP operates a plant, to cut emissions by almost 40 percent.

AKINS: It seems to be those states that have a lot of natural gas that there is, at least the presumption, that you can have ability to move generation from coal-fired generation to natural gas-fired generation.

YDSTIE: Natural gas produces half the carbon emissions of coal, so it can move states and utilities closer to their goals. But, says Akins, moving to more gas generation and reducing the amount of coal means higher costs for electricity, since coal is the cheaper fuel.

AKINS: That's going to drive up costs for consumers, in the end. And that seems to be the direction that this process is going.

YDSTIE: But the EPA predicts that its plan will actually lower the overall utility bill consumers pay because the plan includes conservation programs, which will cut electrical consumption by households and businesses. Scott Segal is not impressed.

SCOTT SEGAL: The notion that you'll save money because the government will tell you to use less energy, I think, is pretty cold comfort.

YDSTIE: Segal directs the Electric Reliability Coordinating Council and he lobbies on behalf of utilities with coal-fired power plants.

SEGAL: Let me say that the rule is not as bad as it could have been because it could have been quite terrible. We are troubled by the potential of the rule to raise bills for families and small businesses and schools and hospitals - folks that depend on affordable and reliable power.

YDSTIE: While the industry says it wants to work with the EPA over the next year's comment period to improve the proposed role, Segal says there's no doubt it will end up in the courts.

SEGAL: I think it is a virtual certainty. This proposal is on very questionable legal ground.

YDSTIE: To schedule calls for the EPA to adopt a final rule a year from now. Then the states will have up to two more years to finalize their plans. John Ydstie, NPR News, Washington.

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Now to the results of an unusual primary race in a rural Pennsylvania district. A four-term Republican state legislature lost his party's re-election bid to a write-in candidate. His supporters say it could be because he came out as gay after his last election. From member station WPSU Kate Lao Shaffner takes us to Huntington, Pennsylvania for more.

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