PUC Chair Blasts EPA’s Clean Power Plan

Via Texas Lawyer:

Donna Nelson, chairman of the Public Utility Commission of Texas, doesn’t mince words about her views concerning the U.S. Environmental Protection Agency’s proposed Clean Power Plan.

On March 2, she gave a speech titled “Power, the EPA and Texas” at the Texas Tech Law School’s Energy Law Series and said that the proposed Clean Power Plan is really a carbon tax.

“The EPA recognizes that it doesn’t have the authority to pass such a tax,” she said. “So the EPA is trying to get states to come up with ideas to make it workable.”

Nelson, a Texas Tech Law School graduate herself, told the law students at the event that the Clean Power Plan seeks to force power companies to use more renewable energy, such as wind and solar, and fewer fossil fuels, such as coal. She said this is a problem because wind and solar energy are inconsistent, and fossil fuels are needed to power the grid during times the wind dies down or the sun isn’t shining.

Texas will be required to reduce coal emissions by 51.91 percent, greater than combining the next nine other leading states that generate coal emissions, according to Nelson. In addition, she said that Texas will be required to increase its renewable capacity by 153 percent, greater than 29 other states combined.

“Increasing renewable resources by the required 153 percent would mean that Texas would have more renewable resources on the grid than state usage in the spring and fall,” Nelson said.

The cost of implementing the Clean Power Plan to the state will be an increase of $10-$18 per megawatt hour by 2030, Nelson said, citing a group called The Brattle Group. But she said that she believes the increase will be closer to $35 per megawatt hour.

“The Electric Reliability Council of Texas, the independent system operator that manages most of the electric load in Texas, estimates that the Clean Power Plan alone could increase customer prices by up to 20 percent by 2020,” said Nelson.

She explained that the proposed Clean Power Plan has four building blocks: make fossil fuel power plants more efficient; use low-emitting power sources, such as natural gas combined cycle units, more frequently; use more zero- and low- emitting sources (dispatch to new clean generation, including wind and solar); and use electricity more efficiently.

All resources in ERCOT, including generation and demand response, bid into the ERCOT market every five minutes, according to Nelson. ERCOT accepts the bids of the resources that are most economic.

“With ERCOT, everything competes with each other. For example, now the price of natural gas is attractive because it is not expensive and has gone down compared to where it was in 2008,” she said.

Nelson said that instead of having economic dispatch within ERCOT, the Clean Power Plan would require environmental dispatch, where resources are dispatched based on a mandate from the EPA.

“Switching ERCOT’s emphasis from economic to environmental is the same as a carbon tax,” Nelson said.

Enesta Jones, an EPA press officer based in Washington, D.C., said, “The agency is in the process of reviewing more than 3.5 million comments as we work to finalize the Clean Power Plan this summer.”

Ron Curry, head of EPA’s Region 6, which serves Texas and four other states, did not immediately return a call seeking comment.

See the article here.