EPA toughens targets, stokes political fire in Appalachia

Source: Jean Chemnick and Manuel Quiñones, E&E reporters • Posted: Wednesday, August 5, 2015

Two Appalachian governors who’ve resisted calls to “just say no” to U.S. EPA’s Clean Power Plan are facing increased political pressure today after the final rule assigned their states much stiffer responsibilities for curbing heat-trapping emissions from power plants.

Kentucky Gov. Steve Beshear and West Virginia Gov. Earl Ray Tomblin — both Democrats — are being urged by their states’ congressional delegations, attorneys general and coal companies to not submit plans for complying with the rule for existing power plants. The governors have resisted, saying their states would fare better with their own emissions plans. This stance was eased by the fact that EPA’s 2014 draft assigned both states light targets.

But that changed yesterday when EPA finalized a rule with significantly different state targets under which both Kentucky and West Virginia ended up with much heavier lifts (E&ENews PM, Aug. 3).

Kentucky’s Energy and Environment Cabinet had planned for a rule requiring the state to hold its power-sector emissions rate to 1,763 pounds per megawatt-hour by 2030. But EPA is demanding 1,286 pounds per MWh by that year, a 41 percent emissions cut compared with 18 percent in the draft rule.

West Virginia’s target also increased from the proposed 1,620 pounds per MWh to 1,305 pounds per MWh in the final rule — a 37 percent emissions cut, compared with 20 percent in the draft.

The new targets demand sharp pivots from coal, which has long been a cornerstone of their power mixes and identities.

Beshear and Tomblin expressed discomfort with the final rule in statements yesterday, but neither jumped onto the “just say no” bandwagon.

Despite expressing frustration and disappointment, Beshear said the state would “continue to explore ways for Kentucky to comply with the rule should it become law, because we believe that a Kentucky-specific plan would be better than a federal plan imposed on us.”

And while Tomblin noted pressure from “those who employ our hardworking miners,” he said his administration remains undecided about compliance.

“At this point,” he said, “West Virginia still has not determined whether it will submit any plan to the EPA.”

Elections, coal lobby could shift state responses

But the pressure on the administrations is mounting in the face of the final rule’s tighter targets and because of upcoming elections.

Kentucky Republican gubernatorial candidate Matt Bevin has vowed to reject EPA’s rule and has made it a cornerstone of his campaign. In statements yesterday, he tried to tie Democratic opponent Jack Conway to environmental groups and President Obama. Beshear is term-limited and cannot seek re-election.

Despite the criticism, Conway, the state’s attorney general, also pledged to “just say no.” He told Beshear that trying to comply “would be a waste of time and resources.” Conway also vowed to participate in litigation against EPA.

Meanwhile, the state’s coal industry showed growing frustration with Beshear’s administration and with some state representatives, including Rep. John Yarmuth (D), who have not come out swinging against the rule.

Bill Bissett, president of the Kentucky Coal Association, said yesterday that “unfortunately, a handful of Kentucky’s political leaders have been out of step by working with the EPA to not only support, but also develop this job-killing regulation.” He was referring to Beshear and other state leaders working on compliance.

Pressing for a boycott, Bissett said, “The good news for Kentuckians is that both candidates to be our next governor have made their positions clear against these GHG regulations.”

In West Virginia, Republican gubernatorial candidate and state Senate President Bill Cole touted the GOP takeover of the state Legislature and a measure giving lawmakers veto power over plans to implement the Clean Power Plan. So either at the state Capitol or at the Governor’s Mansion, he vowed to veto an implementation plan. Tomblin is term-limited and won’t be running for re-election.

Bill Raney, head of the West Virginia Coal Association, applauded lawmakers and Attorney General Patrick Morrisey (R) “for their previous efforts to protect West Virginia’s coal miners and electric consumers from this reckless and expensive plan.”

Raney’s statement did not mention Tomblin. While the governor and many of the state’s Democrats have also long been pro-coal, industry interests in Appalachia have increasingly been relying on Republicans for support.

West Virginia Democrats vying for victory in 2016 include Senate Minority Leader Jeff Kessler, who has talked about diversifying the state’s economy away from coal, and billionaire businessman Jim Justice, who owns coal mines. Both have been relatively silent on the Clean Power Plan.

The states’ congressional delegations urged their governors to refuse to comply as well.

“The final rule announced today doubles down on the destruction of West Virginia’s economy,” Sen. Shelley Moore Capito (R-W.Va.) said in a statement yesterday. She is pushing a bill with support from her Democratic West Virginia colleague, Sen. Joe Manchin, that would allow states to opt out of the rule for a variety of reasons related to reliability and cost.

“Several governors have already decided they won’t allow the administration to rush them into adopting these regulations. I expect more to follow,” said Senate Majority Leader Mitch McConnell (R-Ky.), who has spent the last several months urging governors to not comply with the rule.

McConnell noted that the Senate will devote some time this fall to trying to topple the rule through any means available, including the rarely used Congressional Review Act and riders on legislation to fund the federal government (E&E Daily, Aug. 4).

State laws and the Clean Power Plan

Besides the political pressures in Kentucky and West Virginia, there is also the question of whether either state can comply with the standard given state laws now on the books that limit the scope of state plans.

The tighter targets might make that trickier as well.

Before yesterday, Kentucky Energy and Environment Secretary Leonard Peters thought he had found a way to submit a plan that did not run afoul of a state law that limits a state implementation plan to reductions that can be achieved on site at fossil fuel power plants.

That’s because the draft target asked Kentucky to make few additional reductions beyond those that would have occurred under a business-as-usual scenario.

While the state’s 2012 baseline average rate of emissions was 2,166 pounds per MWh, reflecting a 90 percent reliance on coal-fired power that has long characterized Kentucky’s fuel mix, the state was already diversifying.

Peters and his Cabinet said in March that they were working on an “80 percent plan” — or set of recommendations — to hand off to the next governor’s administration that would claim full credit for a spate of power plant shutdowns that were already in the works and would take Kentucky’s emissions to about 1,796 pounds per MWh by 2030 under a business-as-usual scenario.

Fuel switching that is already planned would take the state within striking distance of its goal, they said (Greenwire, March 4).

Reached today, the Cabinet said it was still reviewing the EPA rule.

And West Virginia regulators must submit any plan to the state Legislature for vetting — complete with a cost-benefit analysis and other materials. Tomblin seemed to take a dim view yesterday of the state’s chances of crafting a plan that would pass muster.

“While the [Department of Environmental Protection] works on the report required by the legislature, we continue to review our legal options and are working to determine what a federally developed state implementation plan would involve,” Tomblin said, referencing a proposed federal implementation plan that relies on emissions trading. The plan would be enforced in states that opt not to submit a strategy of their own.

Reporter Emily Holden contributed.