Power plant regulation could affect cooperative ratepayers

Author: Amy Volk | Posted: 9/25/2013

EPA is reconsidering a regulation that would set limits on emissions of hazardous air pollutants during the startup and shutdown of coal-fired power plants. The proposed rule could increase electricity bills for rural electric cooperative utility consumers.

“It’s a relatively small detail that could turn into a big problem,” said Rae Cronmiller, environmental counsel for the National Rural Electric Cooperative Association (NRECA). In comments filed with the EPA regarding the final rule, NRECA asked the agency to adopt a more flexible definition of “startup” to better accommodate different power plant designs, which need varying amounts of time to begin generating power.

NRECA also stressed the importance of clear statements requiring that clocks measuring startup time reset when startup fails and limiting the definition of “startup” in the rule to hazardous air pollution regulations. Cronmiller warned that, absent these changes, power plants could run into unanticipated compliance issues when they attempt to renew their operating permits.

Some environmental groups, such as the Sierra Club, the Environmental Defense Fund and the Environmental Integrity Project, submitted comments urging the EPA to stand firm on startup and shutdown regulations, arguing that power plants release pollutants at higher rates during startup than other times. But any regulations against pollution should at least “be do-able for responsible operators,” Cronmiller said, indicating that the rule’s writers probably did not mean for it to be used to harass coal plants.

Regardless of EPA’s intent, “Regulatory creep happens all the time,” Cronmiller said. And the consequences could be significant. Regulatory fees add up quickly, and the structural adjustments plants would need to avoid them would be prohibitively expensive. “Any cooperative cost is eventually borne by the consumers,” Cronmiller said, since cooperatives cannot appeal to investors or taxpayers as investor-owned or municipal utilities might. Electric cooperative customers generally pay higher rates than other electricity consumers because the greater spaces between rural homes and businesses create higher distribution costs.

Cooperatives also rely on coal for more of their power than other utilities, furthering the chances of rate increases in rural communities due to this regulation. Last year, the country’s 40 rural electric-generation cooperatives derived 70 percent of their power from coal, compared with 37 percent for all U.S. generators. More than 16 million residential consumers, 13 percent of the national total, purchased $26 billion of electricity from cooperative utilities, according to an NRECA fact sheet.

The comment period on this proposed rule closed on August 26. The EPA currently is evaluating the comments received and considering next steps. The regulation comes at a sensitive time for coal. Development has slowed due to increased interest in natural gas. Last week, the EPA, following the president’s order to address climate change without waiting for Congress to act, issued a greenhouse gas emissions limit for new power plants.

That regulation, critics argue, places a moratorium on new coal-fired power plants unless they employ carbon capture and sequestration technology. This will affect electric cooperatives’ abilities to retire and replace working coal plants and further deter development of new plants.

Source: Agri-Pulse