NC fights EPA’s Clean Power Plan

Even as world leaders gathered in Paris to establish goals for reducing greenhouse gas emissions to mitigate the impacts of climate change, North Carolina leaders were positioning our state to be the first one in the country to defy federal efforts to tighten air emissions standards.

In August, the U.S. Environmental Protection Agency released its Clean Power Plan, which lays out new requirements for reducing carbon pollution from power plants and establishes state-by-state emissions limits. The EPA regulations take effect next September; states can either submit their own compliance plan or let the federal agency do it.

The new regulations aren’t expected to have a big impact in North Carolina, however. Although the state will be required to cut emissions about 32 percent by 2030, it was already on track to exceed that target well before that date, thanks to previous utility company commitments and the state’s Clean Smokestacks Act and Renewable Energy and Energy Efficiency Portfolio Standard. Thus, no additional reductions would be needed to satisfy the EPA rules.

Nonetheless, Gov. Pat McCrory and the state Department of Environmental Quality are aggressively positioning North Carolina for a court battle with the EPA. Despite objections from Attorney General Roy Cooper, McCrory has joined more than 20 other states in a lawsuit alleging that the Clean Power Plan requirements exceed the federal agency’s authority.

State officials also say the EPA’s requirements should have been based on North Carolina’s 2005 emissions rate, rather than 2012 figures. “The final rule uses a 2012 baseline, which prohibits North Carolina from receiving credit for the reductions made between 2005 and 2012,” Department of Environmental Quality Secretary Donald van der Vaart said in a written statement posted on the agency’s website two days after the Clean Power Plan was released. “As such, North Carolina’s nearly $3 billion of investments made under the Clean Smokestacks Act are ignored. North Carolina will be penalized for passing the Clean Smokestacks Act, instead of being rewarded for reducing air pollution earlier than required by federal law.”

But according to Molly Diggins, state director of the Sierra Club’s North Carolina chapter, the lawsuit “will cost the state countless dollars to litigate the rule, without taking significant steps to reduce our carbon emissions in the meantime. This entire process is disrespectful of the public input and basic tenets of good governance.”

State officials divided

The Clean Power Plan gives states three ways to meet its requirements: reducing CO2 emissions from power plants, increasing the amount of renewably generated energy, and converting coal-fired power plants to natural gas. To provide flexibility in meeting the requirements, power plants within the same state can trade emission reduction credits.

The plan allows states to calculate emissions in one of two ways: CO2 production per megawatt-hour of electricity or total CO2 emissions by mass. The mass-based method would would require North Carolina to reduce annual CO2 emissions to 51,266,234 tons. But even without the new rules, the EPA projects that the state will have cut annual emissions to 48,856,544 tons by as early as 2020 — 10 years ahead of schedule.

“The reality is, the strategies to meet the Clean Power Plan reflect the energy shift already underway: We’re embracing smarter, cleaner, cheaper energy options that would be happening with or without this plan,” says Frank Rambo, a senior attorney with the Southern Environmental Law Center. “As a result, our states are well-positioned to meet these reasonable and inevitable pollution reduction targets.”

But a review by the Department of Environmental Quality (formerly the Department of Environment and Natural Resources) “reveals that the rule remains legally flawed,” van der Vaart’s statement contends. “DENR, along with many leading environmental groups, have consistently maintained that the federal EPA cannot legally use section 111(d) of the Clean Air Act to regulate emissions from coal-fired power plants. The final rule also encourages trading as a means to satisfy section 111(d). North Carolina agrees with these same special interest environmental groups that trading is not permitted under Section 111(d).”

In an Aug. 7 letter to legislative leaders, who were debating a bill that would authorize the Department of Environmental Quality to file suit, the state’s attorney general wrote: “I encourage you to avoid the path of litigation and instead work on a cooperative effort we can all be proud of. Piecemeal litigation like this can significantly harm our effort to implement our own clean power plan, along with risking a federal takeover of North Carolina energy policy that we could otherwise avoid.”

Forcing the issue

Meanwhile, the Department of Environmental Quality is rushing to finalize a plan that’s expressly designed to be rejected by the EPA, critics say. According to N.C. Policy Watch, a Raleigh-based nonprofit that reports on state politics, the DEQ’s plan would achieve only 0.4 percent of the EPA’s emissions reduction target. This, the nonprofit says, positions North Carolina to be the first state to have a plan rejected by the agency. The DEQ is also producing a backup plan, however, in case the lawsuit is unsuccessful, Public Information Officer Stephanie Hawco reports.

The state’s Environmental Management Commission approved the DEQ plan after reviewing it for one day, waiving its customary 30-day review period and drawing sharp criticism.

“In order to meet a false deadline to pursue a politically charged lawsuit, the commission gave up its own 30-day opportunity to study the rule, and scheduled public hearings at the peak of the holiday season,” Diggins wrote in a commentary posted on an N.C. Policy Watch blog called The Progressive Pulse. “Rather than make an honest effort to reduce carbon emissions, the McCrory administration would rather use taxpayer money and resources to pick a fight with the EPA.”

Secretary van der Vaart’s statement also cites an analysis by the consulting firm Energy Ventures Analysis Inc., which asserts that the EPA plan will place an excessive financial burden on low-income consumers and stifle manufacturing growth.

According to the EPA’s models, however, the Clean Power Plan will actually reduce customers’ bills.

And in February, consultants RTI International and ScottMadden released an analysis of the economic impacts of clean energy development and energy efficiency initiatives in North Carolina prepared for the NC Sustainable Energy Association, a nonprofit trade group. Integrating renewable energy and energy efficiency to comply with the Renewable Energy and Energy Efficiency Portfolio Standard, the report concluded, would save ratepayers $651 million between 2008 and 2029.

Meanwhile, key employers in the state also say renewable energy is key to recruiting new businesses. In May, as state lawmakers were considering amendments to encourage the use of natural gas to generate electricity, TechNet, a lobbying organization serving major technology companies, sent a letter to the General Assembly signed by Apple, Facebook and Google, all of which operate data centers in North Carolina.

“As global companies providing services to consumers around the world from our operations in the state, a reliable, sustainable electricity supply is critical and requires sourcing power from renewable energy,” the letter stated. “In fact, the right and ability to access power from renewable resources is not merely a goal but an expectation.”