CARB chief Nichols talks power plan changes, ‘just say no’ option 

Source: Monica Trauzzi, E&E • Posted: Friday, March 13, 2015

What changes should U.S. EPA make to its Clean Power Plan proposal to add clarity and flexibility on multi-state and regional program options? During today’s OnPoint, Mary Nichols, chairwoman of the California Air Resources Board, discusses expected changes to the power plan as the agency prepares its final proposal. Nichols also responds to the growing momentum surrounding the “just say no” option for state compliance.

Click here to watch today’s OnPoint.

Monica Trauzzi: Hello, and welcome to OnPoint. I’m Monica Trauzzi. With me today is Mary Nichols, chairwoman of the California Air Resources Board. Chairwoman Nichols, thank you for joining me.

Mary Nichols: It’s a pleasure.

Monica Trauzzi: You’re in town to testify before the Senate Environment and Public Works Committee with other state officials.

Mary Nichols: Correct.

Monica Trauzzi: On the subject of EPA’s Clean Power Plan. California Gov. Brown recently said that on climate policy California is a separate nation. Why is California’s story so important then to other states as they craft their compliance plans for the Clean Power Plan, since your story’s been pretty disconnected from what many of the other states in the country have been doing?

Mary Nichols: Well, actually we’re not that dissimilar from other states. We are the only state that has a comprehensive climate plan with a cap and a target, which is similar to the Kyoto treaty requirements. So by law, California is on a path to return our admissions to 1990 levels by 2020. And we’ve been on that path since 2007, when Gov. Schwarzenegger first signed the law. But I think one of the things that that governor was referring to is our history of having dealt with air pollution successfully in the past. Not that we’ve eradicated it, but anybody who visited California in the ’50s or ’60s, or even the ’70s, knows that you couldn’t see the mountains on most days. We had many smog alerts. Days when children couldn’t play outdoors. And we were able to really change that entire situation as a result of a very aggressive and successful program that regulated fuels, and vehicles, and power plants primarily.

And so the fact that we have this history of having worked with some of the same sources that are now being targeted for further action for global warming I think is the thing that gives us a position where internationally California is recognized as a leader, and we are being looked to by countries like China and India as a resource.

Monica Trauzzi: Many states are grappling with the question of how to comply with the Clean Power Plan. Others are questioning whether they even should. And Senate Majority Leader Mitch McConnell recently urged states not to prepare implementation plans. Is there truth to his contention that states could face legal challenges resulting from their compliance with the power plan?

Mary Nichols: Well, I would hesitate to say ever to somebody that they couldn’t be challenged in court, because you can be sued by anybody. The question is are they going to succeed, and are they going to block this program? And I think the answer to that is no. And I think it’s very bad advice and frankly, I think most states are not going to follow it. Even states that have governors and legislatures that are vehemently opposed to climate action are going to recognize and already are in many cases, working to figure out pragmatic ways that they can comply.

Look, the Clean Air Act has been the law of this country for a very long time, and states have been required to file plans with EPA to meet the clean air standards, and with occasional issues and a little bit of backsliding from time to time, the reality is that all the states in this country have made tremendous progress towards cleaning up their air and making it healthier for their citizens. They all have programs for dealing with their energy systems. They have different configurations, but they all have public utilities commissions, they all have energy planning agencies as well as their environmental agencies. And these entities are going to get together and they’re going to figure out the most practical and cost effective way for their states to comply.

Monica Trauzzi: I recently interviewed Georgia PSC Commissioner Tim Echols, and he said his state is not yet working on compliance measures. What’s your take on those states that are sort of taking the wait-and-see approach until there’s a final rule available?

Mary Nichols: Well, I wouldn’t contradict him in terms of what his own state is doing, because I don’t know, but Georgia for years has had a very effective and active program on the environmental side dealing with clean air requirements. I think one of the problems that we’re seeing is that the new thing about this EPA Clean Power Plan is that it’s putting EPA agencies, that is the air agencies in most states, in a position where they have the lead in complying with something that their public utility commissions have traditionally thought was their turf. And so individual states are going to have to work that one out.

Monica Trauzzi: Regional plans and linking have been sold by the agency as key tools for state success. What conversations has California had with other states about linking?

Mary Nichols: We’ve been very active in two different arenas. One is the Pacific Coast Collaborative which is an organization that’s actually existed for years for Washington, Oregon, California of course, and British Columbia to work together on issues of common concern. And the four governors of those entities have an agreement working together to try to figure out how to do a common carbon pricing program, and also to work on other climate-related issues. We’ve done a lot on zero-emission vehicles, plug-in vehicles together. Oregon just adopted a low carbon fuel standard like California’s, and we will be talking to them about how to implement the Clean Power Plan.

We’ve also been active participants with all the Western states in a conversation that’s been hosted by Gov. Ritter at the center that he runs in Colorado, Colorado State University. And that has been working-level bureaucrats digging in to talk about some of their common issues and concerns. We signed a joint letter, all of us to EPA, asking for areas where we felt there was a need for more flexibility and more certainty about the regulation. So that was a first step showing that these states could actually do something irregardless of whether we’re red states or blue states, and whether we think we will have a lot of renewables or not, et cetera.

So I think it was a start, but of course, talking about markets, and trading and so forth, it’s a very touchy subject, and everybody’s proceeding very carefully to try to look at the modeling, looking at their own economic analyses, and try to figure out what kind of a plan is going to work best for them.

Monica Trauzzi: And what changes are you expecting from the agency as they prepare to release their final rule?

Mary Nichols: Well, I think they’ve been pretty clear on some of the things that they’re planning to do. They’re planning to make it clear that the four pillars or building blocks there don’t all have to be included in the state plans. That these are more or less guidance of things that could be in the plans as opposed to boxes that will have to be checked. I think they’re going to be clear about the degree of flexibility that states have to submit a plan which encompasses their whole energy regulatory system without having to make that system federally enforceable. So basically something that’s more of a this is how we comply with backup rather than here it all is, now you take it over. I don’t think EPA wants to do that anyway, but they can’t even be in a position where anyone might think that they could bring a suit against EPA to force them to cite a solar plant in California, for example. That would not be acceptable to us or any other state I’m sure.

And then on the plans that we want to work on jointly, I think they’re going to make it clearer and easier for states to collaborate across state lines without necessarily having to sign up for some big common market kind of regional plan.

Monica Trauzzi: And beyond the regional plan that California is involved in, how is your compliance plan shaping up?

Mary Nichols: Well, we’re going to have to file a plan obviously, just like everybody else, and we’ve taken a hard look at some of the issues we think that our cap-and-trade plan plus our existing power plant requirements and our energy efficiency programs will satisfy the requirements of the rule. But we’re going to have to go through the process and dot all the i’s and cross the t’s just like everybody else.

Monica Trauzzi: A congressional question for you. Sen. Boxer has announced that she won’t be seeking re-election.

Mary Nichols: Yes.

Monica Trauzzi: How do you think her departure could shift the dynamic of the conversation on climate in the Senate?

Mary Nichols: Well, she certainly has been a fierce champion on the issue, and we will miss her greatly. She’s been a real leader as well as somebody that we look to as an office that we could go to whenever we were in town. I think though that from what I’ve seen, there’s now a pretty solid group of senators who are very interested in climate. I met today in addition with Sen. Boxer, with Sen. Whitehouse, who clearly is very knowledgeable and very determined, and is thinking very strategically about these issues. And you know, there’s quite a number of other senators who are also part of that group, so I think they’re going to keep the issue alive. More than alive. I think they’re going to keep pushing to find ways that they can make progress. But right now, what’s on the plate is the administration’s action on power plants, and we need to make sure that they finish that.

Monica Trauzzi: All right, we’ll end it right there. Thank you very much.

Mary Nichols: Thank you.

Monica Trauzzi: Nice to see you.

Mary Nichols: Pleasure.

Monica Trauzzi: And thanks for watching. We’ll see you back here tomorrow.