Analysis calls rule ‘very achievable’

Source: Amanda Reilly, E&E reporter • Posted: Thursday, January 14, 2016

A new study analyzing different compliance scenarios for U.S. EPA’s Clean Power Plan calls the new rule “very achievable.”

The analysis by M.J. Bradley & Associates, an environmental consulting firm, also found the United States could sustain a diverse energy mix under the program, which compels states to lower carbon dioxide emissions from power plants.

The analysis also found that having states or companies trade emissions credits or allowances can “significantly” help them reduce the costs associated with the Clean Power Plan.

“This comprehensive analysis shows that, by various pathways, the Clean Power Plan’s carbon pollution reduction goals are very achievable,” Christopher Van Atten, a senior vice president at the firm, said in a statement.

The Clean Power Plan aims to lower carbon emissions from power plants 30 percent by 2030 compared with 2005 levels. States are currently developing compliance plans even as the courts weigh the new standards.

The U.S. Court of Appeals for the District of Columbia Circuit will soon decide whether to halt the Clean Power Plan while legal challenges play out.

Nearly 150 opponents, including 27 states, have sued to overturn the rule. Those critics say the program is illegal and will impose burdensome compliance costs.

M.J. Bradley said it developed 14 scenarios for complying with the rule, including some with different amounts of energy efficiency baked into the equation.

The firm also analyzed both mass- and rate-based compliance approaches; EPA is allowing states to choose between the two. Utilities, trade associations and nonprofit organizations provided input for the analysis.

M.J. Bradley predicted wind and solar would grow under all scenarios and supply between 11 and 15 percent of the nation’s electricity by 2030.

But the analysis also showed that nuclear power, natural gas and coal can remain part of the energy mix under the Clean Power Plan. Natural gas, for example, is projected in all scenarios to make up between 25 and 32 percent of electricity in 2030.

“The nation’s electricity sector can significantly reduce carbon dioxide emissions,” Van Atten said, “and employing a mix of clean energy resources will both help clean up the air and cut costs of doing so.”

Energy efficiency programs can lower compliance costs because they lead to fewer new power plants being built and less energy being used at existing facilities, the report also concluded.

The firm found that customers’ electricity bills would drop, on average between 5 and 20 percent, under the Clean Power Plan.

The analysis does not take into account recent congressional action to extend wind and solar energy tax credits, but M.J. Bradley said it would add the extensions in future studies.

In states choosing a mass-based approach — in which regulators cap carbon emissions from the power sector and allocate allowances based on that cap — M.J. Bradley warned of “leakage.” In other words, carbon emissions could shift to new power plants that aren’t part of the program.

Wrapping those new plants into the allowance program would be the “most straightforward approach” to address the issue, the firm said.