EPA's Clean Power Plan: Texas's Last Stand or Last Hope?
August has been an eventful month here in Texas. And, no, I’m not referring to news about Governor Rick Perry, rather some of his appointees. The Texas Public Utility Commission (PUC), Texas Commission on Environmental Quality (TCEQ), Railroad Commissioners (RRC) Barry Smitherman and Christy Craddick, and State Representative Jason Isaac held a joint session to discuss the Environmental Protection Agency’s (EPA) new Clean Power Plan (CPP).
The CPP will limit – for the first time ever – carbon emissions for existing power plants. Texas, the number one polluter in the country, needs to cut 195 billion pounds of carbon in the next 18 years, according to a Texas Tribune analysis. However, EPA suggests Texas could easily meet its goal through a combination of actions: making coal plants more efficient, using more natural gas plants, increasing the use of renewable resources, and expanding energy efficiency.
Texas has a choice: either roll up some sleeves and double down on the state’s clean energy leadership, creating jobs and wealth, or continue to play petty politics to buy the fossil fuel industry more time.
Innovate, don’t procrastinate
The Brattle Group and Texas Clean Energy Coalition created a roadmap to cut pollution and grow the state’s economy, which can be used as a model to meet the CPP. The report states: “the scenario with the most aggressive assumptions for efficiency, demand response, and combined heat and power was also found to deliver the lowest power prices in 2032,” and “the more demand-side resources deployed, the more money Texas would save.”
Was that report mentioned in Friday’s hearing? No.
Among the 25 or so stakeholders invited to testify, only a handful represented the renewable energy sector and the environment – and there were plenty of claims that these rules would be a “death knell to the Texas Miracle” and “the junking of the competitive market.” You might’ve thought the world was ending with EPA leading the cavalry of Bluecoats in to oversee the entire electric grid of Texas and beyond!
EPA Administrator Gina McCarthy has already debunked this rhetoric though: “In the 1990’s critics cried wolf and said fighting acid rain would make electricity go up and our lights go out, they said the industry would and I quote, die a quiet death. Well, they were wrong again, industry is alive and well. Our lights are still on and we have dramatically reduced acid rain.” Even though the last amendment to the Clean Air Act was made in 1991, the 1990’s were one of the most prosperous economic times in our country’s history.
EDF’s general counsel and Clean Air Act expert, Vickie Patton, testified that EPA is agnostic as to how Texas complies, so long as the reductions occur. There is flexibility inherent in the rule, as has been the case with other air pollutants despite Texas’ myriad failed attempts to sue EPA. PUC Commissioner Ken Anderson seemed thoughtful as he tried to understand the rule’s flexibility and how EPA’s role would ultimately be limited if Texas took a proactive stance on the CPP.
On the defiant side, RRC Commissioner Smitherman brought up the idea of developing a state compensation fund to support companies that choose not to comply, opting for a fine from EPA instead. Luminant CEO Mac McFarland, however, reminded him that there are also criminal violations to opposing EPA rules, stating: "I don't think anybody's going to go to jail for you."
Amplify current trends
To date, the Texas wind industry has invested $26 billion in this clean energy resource for the state, providing an economic stimulus to “long-neglected rural areas.” On an apples-to-apples basis, wind power employs 26,000 Texans, which provides 66 percent more jobs than nuclear and 30 percent more jobs than coal. According to the Wind Coalition, Texas’ “land-based wind potential is the best resource in the United States and the equivalent of 18 times the state’s current electricity needs."
And, even as wind has become a major player with almost ten percent of the energy sales in the state, solar is finally becoming competitive with conventional resources, like natural gas. Solar installations are rising from 200 megawatts in 2013 to more than 1,100 megawatts by the end of 2017, ranking Texas highest in the nation for solar growth potential. First Solar is even trailblazing the merchant market (selling directly into the competitive wholesale market) with its 22 megawatt Barilla project in West Texas.
But regulators are trying to slow or even stop the growth.
In a memo sent this past May, PUC Chairman Donna Nelson claimed wind energy tax credits give the resource an unfair advantage against fossil fuels that potentially alters market outcomes, despite ample evidence to the contrary. This memo was just the beginning, as it appears new, unprecedented costs imposed on renewable energy will now tilt the playing field against renewables in Texas. Historically, all participants – from power plants to residents and businesses – have shared the cost to maintain a reliable power grid, because everyone relies on a dependable system to keep the Texas economy humming.
Now, Chairman Nelson is looking to shift some of those costs solely to renewable energy, stifling growth and innovation, particularly in rural West Texas (where wind energy has led to the biggest economic revival since the Great Depression and solar energy is just starting to take root).
Officials should instead focus their attention on a Texas way to reduce pollution and meet the Clean Power Plan standards by relying on more customer-facing, demand-side resources and clean technologies (like wind, solar, and energy efficiency), lest we find ourselves in the midst of a debacle similar to the greenhouse gas permits. One policy question that remains is whether Texas will receive credit for the actions it has taken since 2005 that already have reduced carbon emissions. These actions have avoided 25 million tons of carbon-dioxide emissions per year with wind energy alone – equivalent to taking 4,075,000 cars off the road.
States have two years to determine how to comply with the Clean Power Plan. In the meantime, EPA will review comments for revising the proposed rule. This allows for compromise, and Texas leaders should take this time to craft the best framework for the state.
There are opportunities to deliberate Texas’ clean, low-carbon future in good faith, and it would be a mistake not to do so.
This commentary originally appeared on our Texas Clean Air Matters blog.
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