Glasgow Daily Times, Glasgow, KY

June 19, 2014

Kentucky actually fares well under new EPA regs

By Ronnie Ellis
CNHI

LAUREL COUNTY, Ky. —

FRANKFORT — Kentucky politicians and the coal industry howled about the latest installment of greenhouse gas emission regulations issued last week by the federal Environmental Protection Agency.

But Kentucky actually fares pretty well under the regulations that apply to existing power plants because Dr. Len Peters, secretary of the Kentucky Energy and Environment Cabinet, and his staff worked hard to influence how the regulations were written.

Last fall, Peters sent a white paper to EPA and he and Gov. Steve Beshear subsequently met twice with EPA Administrator Gina McCarthy to plead for flexibility in meeting the new carbon limits, especially for states like Kentucky that depend on coal-fired electrical generation to serve manufacturing industries.

In addition to Peters' and Beshear's efforts, John Lyons, the cabinet's assistant secretary for climate policy, met often with EPA and, according to Peters, “was invaluable in carrying our message nationally.”

It worked. EPA listened to Kentucky's concerns.

The cumulative national goal is to reduce carbon emissions by 30 percent by 2030. But not every state has to reduce its emissions by that much, including Kentucky. The regulation takes into account special circumstances of individual states and sets different goals for each. 

Kentucky must lower its pounds of carbon per megawatt hour from about 2,166 pounds in 2012 to 1,763 pounds per megawatt hour in 2030. That's only an 18 percent reduction. Kentucky can also average its carbon rate across all forms of electrical generation which means it won't have to meet the 1,763-pound limit at each individual coal plant as the National Resources Defense Council wanted.

“I think we're most happy that EPA recognized the existing electricity generation portfolio of each state because all states are different,” Peters said. “They recognized that manufacturing states have a particular role in the national economy but also have a larger industrial component where electrical rates can impact their economies in a very significant way.”

But that's just part of the story. While Kentucky got off easy in the short term it faces a bigger problem in the long term.

There are two components to President Barack Obama's climate policy: regulations issue earlier this year for new power plants and those issued last week for existing plants.  It's the rule governing new plants that causes Peters heartburn.

New plants must produce no more than 1,100 pounds of carbon per megawatt hour and both Peters and Lyons say that's not feasible with existing technology.

“That will essentially eliminate any possibility of a coal-fired electrical generating unit being built again,” Lyons said.

EPA doesn't agree. It estimates that by 2030 when the rules are fully in effect, the country will still get about 30 percent of its electricity from coal, down from the current 38 percent. It's 93 percent in Kentucky.

Peters said EPA and the Obama Administration base that hope on developing technology to capture and store carbon, but he's not so optimistic. He said there are two problems to capture and sequestration: cost and scale.

“We've been separating carbon from gases for a while,” Peters said. “The issue is can we find locations near the carbon plants where we can store it.”

Peters said other technology coming on line could reduce CO2 production at its generating source to maybe 1,600 to 1,700 pounds per megawatt hour but nowhere near the 1,100-pound limit for new power plants. But he was unable to persuade EPA to accept the higher limits for new plants.

The problem for Kentucky, according to Peters, is that it must retire nearly a third of its aging electrical generating units by 2030 and perhaps half of them by 2040. And unless something changes, they aren't likely to be coal-fired generators.

But in the short term, the new regulations on CO2 emissions from existing plants will have only minor impact in Kentucky despite the wailing and gnashing of teeth by politicians and the coal industry.

In fact, Kentucky will be credited with greenhouse gas reductions it has already achieved since 2010, Lyons said. And there are some big ones already underway.

The Tennessee Valley Authority is replacing coal-fired generating units in Muhlenberg County with gas-fired units; Kentucky Power Company's Big Sandy coal-fired units in Louisa are also being replaced; and in western Kentucky, Big Rivers Corp. may idle some coal-fired units after an agreement to allow large aluminum smelter customers to buy power on the open market.

All were underway before the existing plant regulations were released last week but all can be counted against Kentucky's 18 percent rate reduction goal.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.