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Last updated: August 3, 2012
First published: August 3, 2012
Article researched and written by David M. White
On December 21, 2011, the Environmental Protection Agency in the United States initiated new federal standards on toxic pollutants and mercury emissions from coal power plants. However, the regulations are to some extent simply a more stringent enforcement of emissions standards the EPA was charged by the US Congress to establish and enforce 20 years ago. Although charged by the US Congress in 1990 to develop standards and limits on emissions from power plants, existing regulations notably excluded any reference to mercury. Other EPA regulations impacting other industrial operations (e.g., waste incinerators) included limits on mercury, but those regulations excluded oil- or coal-fired power plants. The new “rule”, originally scheduled to be effective in 2015, is yet to be finalized and will now likely not take effect until 2016. The EPA has acknowledged that it may have underestimated the number of plant closings the regulations would create, and on July 21, 2012 indicated they would defer finalizing the regulations until March 2013 while they conducted a reconsideration of the rule based on updated information from industry stakeholders.
The actual report being forwarded on Facebook does have some truth in it; however it must also be noted that the report cannot truly be considered as unbiased given the funding sources of the agency that produced it – The Institute for Energy Research. An advocate for free market energy solutions, they also receive substantial financial support from Koch Industries, a company owned by two brothers who are notorious for their animosity towards the Obama administration. Being an election year, the new EPA regulations naturally will be used as a political football. Opponents of the regulation were quick to recall statements made by Obama in 2008 when, as a supporter of ‘cap and trade,’ he stated during an interview “If somebody wants to build a coal-fired power plant, they can. It’s just that it will bankrupt them.” He later added, “Under my plan … electricity rates would necessarily skyrocket.” Even some Democrat members of Congress have a political stake in opposing the regulations due their states’ being large coal producers.
This article is not intended to take any particular side in this issue, and the perceived impact of the regulations depends largely on the political leanings of who is interpreting them. Some of the data points made in the article are, however, quite speculative and entirely debatable.
To address a few of the claims made in the article:
“More than 34 gigawatts (GW) of electrical generating capacity are now set to retire... shuttering over 10 percent of the U.S.’s coal-fired generating capacity”
Overstated. In 2009, the 600+ coal-fired power plants in the US were running at an average of 64% capacity. 2007 was the highest capacity factor on record, and was still less than 75%. Most reliable sources identify 32 power plants that will definitely retire at least one power generation unit, and an addition 37 plants that have at least one unit at risk of retirement. As many of these plants have more than one unit, power generation would not cease at all 69 of those plants entirely. To put in better perspective, there are a total of 615 power plants in the US. In those plants, there are a total of 1,466 generating units. IF all the units listed were shuttered, and IF they were all running at full capacity, it would still only reflect a 7% reduction in capacity. The reduction in generation capacity would also be a factor of the capacity of the units being shuttered versus those whose output could be increased – the capacity of these units targeted for closure ranges from less than 40MW to over 1200 MW, and those are a fraction of some of the units with 60,000MW capacity that are not on the closure list. Any reduction in generation could be offset by utilizing currently stagnant capacity of other units.
34.7 GW of electrical generating capacity will close
Absolute worst case scenario and not supported by other reports.
Michigan and Ohio Hit Worst By Recent Announcements
Those ‘recent announcements’, especially as it affects Michigan, should be tempered by the fact that they were coming at a time that the industry was pushing for reconsideration of the rule. Ohio, which is a heavy coal production state to start with, could conceivably lose over 17% of generation capacity (not necessarily actual power generation, but total capacity).
EPA Regulations are Already Causing Electricity Prices to Dramatically Rise
Not everywhere, and not necessarily due to new regulations. In many states, utilities actually have to ask permission to raise rates from the state’s public services commission, and those rate increases can be denied. (Electrical cooperatives are generally exempt from this.) And there are other reasons power companies request increases – including covering the cost of building new plants that were already being planned for prior to the regulations or maintaining a failing power grid.
There are a great many other arguments bouncing back and forth regarding the regulations, ranging from job loss in the generation units to the health benefits of shutting them down. And it wouldn’t be a truly American political argument without debating the financial cost/benefit.
The topic will almost certainly remain a bone of contention between the current administration and the opposition, so be prepared to filter the rhetoric from the facts.