High court emissions ruling won't deter clean energy drive

Reuters News
|
Posted: Feb 10, 2016 7:36 PM

By Valerie Volcovici and Scott DiSavino

WASHINGTON (Reuters) - The U.S. power sector's shift toward burning less coal and using more natural gas and renewable energy will not be derailed by the Supreme Court ruling against the Obama administration's limits on carbon emissions, state regulators and utilities said on Wednesday.

The U.S. Supreme Court decided 5-4 on Tuesday to block the Environmental Protection Agency’s carbon emissions crackdown on coal plants until a legal challenge is resolved.

Some states may now slow work on compliance with the EPA's Clean Power Plan. But some experts said they were confident the rule will survive the legal challenge when the D.C. circuit court makes a decision this summer.

“In a way we are really just postponing the inevitable,” said Vicki Arroyo, executive director of the Georgetown Climate Center.

Even in some of the 27 states that sued to block the rule, officials had been working on compliance plans.

Most states said they will continue to decarbonize their energy supply. Utilities across the country have already begun a major shift away from coal-fired electricity toward cleaner burning and cheaper natural gas and renewables like wind and solar.

“We fully expect that many of these states will continue their efforts to reduce greenhouse gas emissions under their own legal authorities,” said Bill Becker, director of the National Association of Clean Air Agencies. 

States like California, Colorado and New York criticized the high court's decision and vowed to pursue their plans to shift to cleaner energy regardless of the delay in the EPA rule.

Meanwhile, states like Montana and North Dakota that joined in the lawsuit against the EPA welcomed the “breathing room” the stay provides. But even these opponents of the rule said they will keep diversifying their power supply.

Colorado’s Democratic Governor John Hickenlooper said the state will keep working on compliance so it "is not left at a disadvantage if the courts uphold all or part of the Clean Power Plan.”

Colorado challenged the EPA plan even though the governor supports it. The state's Republican attorney general disagrees about the legality of the rule and its economic impact.

Montana Governor Steve Bullock, a Democrat, opposed the EPA rule. He said the state would put on hold the work of a group to devise compliance options, but added that it still needs "to address climate change and embrace Montana’s energy future.”

He said: “I am committed to ensuring we do so on our own terms.”

For coal-producing North Dakota, which had one of the highest emission reduction targets to meet under the rule, regulators and utilities will keep working on ways to lower power plant emissions, said state health department chief Dave Glatt.

He said the EPA plan did not give the state "a sufficient amount of time to have reasonable solutions." He pledged to "look at reasonable steps forward.”

MARKET FORCES

For most states, coal-fired electricity has been in decline.

In 2015, generators shut over 15,000 megawatts of coal-fired power plants, the most in any year, as low gas prices drove down power costs. It became uneconomical to overhaul older coal plants even to meet existing federal clean air rules.

Ohio regulators said Wednesday they were not sure how the state will respond to the court decision, but the state’s major utilities are already shifting away from coal.

American Electric Power Co Inc will continue generating more power with natural gas and renewable energy since prices for those have dropped significantly, said spokeswoman Melissa McHenry.

She added that the five-year extension of federal renewable energy tax credits has given AEP an incentive to bring more renewable energy into the mix.

“It makes sense that we are sticking to our current plans, and will be positioned to respond to the courts’ ultimate decision on the future of the Clean Power Plan,” she said.

Another Ohio utility, FirstEnergy Corp, said it already retired a number of older coal plants in 2012. The court decision will have little impact.

“The Supreme Court decision does not change the path we are on,” said spokeswoman Jennifer Young. “We think it is the right thing to do – this is a complicated issue and this decision will give the states the appropriate amount of time to develop their compliance plans.”

(Reporting By Valerie Volcovici)