Groups debate energy costs in EIA’s analysis of Clean Power Plan 

Source: Manuel Quiñones and Emily Holden, E&E reporters • Posted: Tuesday, May 26, 2015

U.S. EPA said today it would consider the U.S. Energy Information Administration’s new report on the Clean Power Plant’s impact on the country’s energy landscape as it finalizes the proposal.

EIA’s long-awaited analysis said many states and utilities would seek to comply with the carbon limits for existing power plants by switching from coal-fired generation to natural gas and renewables.

And if the agency tweaks its proposal to treat nuclear power like renewable sources, the country could see more generation from nuclear sources (EnergyWire, May 22).

“EPA appreciates EIA’s work to develop this assessment based on the agency’s proposed Clean Power Plan,” EPA said in a statement this morning, “and the agency will be reviewing the assessment as we work to develop the final rule.”

The National Mining Association, one of the power plant proposal’s top foes, seized on the report’s conclusions that the Clean Power Plan would more than double coal-fired power plant retirements and bump up power prices. Mining would also drop, particularly in Appalachia.

“The EIA report released today should be read by every governor,” said NMA CEO Hal Quinn. The group, along with other EPA critics on Capitol Hill, is urging states to turn away from the proposal.

“It contradicts claims by the Environmental Protection Agency that its Clean Power Plan will help the economy,” Quinn said. “And it confirms that this costly power plan will ‘lock-in’ a more expensive and risky energy future for their citizens.”

EIA’s report makes clear that it doesn’t take sides in the debate on whether the proposal will jeopardize energy reliability. EIA says the country’s power infrastructure would need “significant investment” to handle more wind, power and other renewable sources of energy.

Electricity prices would increase by between 3 and 7 percent between 2020 and 2025 compared to a no-rule scenario, according to EIA estimates. They would be 4 percent higher by 2030 and 2.6 percent higher by 2040.

Natural gas prices would also go up. But because of an increased demand for renewable power over the long run, natural gas use and prices would recede.

“Early headlines about the EIA’s report on the Clean Power Plan don’t tell the whole story. The analysis actually shows that the Clean Power Plan is affordable,” said Steve Clemmer, director of energy research and analysis at the Union of Concerned Scientists.

Clemmer said Congress can help with the Clean Power Plan’s implementation by extending renewable energy tax credits. He said EIA showed states could meet EPA’s proposed carbon cuts, and even exceed them, particularly through regional collaboration.

“States can keep rate increases to a minimum and help avoid an overreliance on natural gas by implementing or strengthening policies to ramp up renewables and efficiency,” Clemmer said, “including proven policies such as renewable electricity standards, energy efficiency standards and carbon caps.”