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Mixed Reaction To Proposed EPA Coal Regulations

Environmentalists happy; politicians, Indiana Chamber oppose the rules

The Harding Street power plant, fueled by coal, owned by Indianapolis Power and Light (photo courtesy IPL)

Reaction to the Environmental Protection Agency's proposed rules on emissions from power plants that burn coal was mostly predictable along political lines.

The EPA proposed a rule that would cut carbon emissions from existing coal plants by up to 30-percent by the year 2030. It would allow states a choice on how to reach the target through upgrades to plants, a conversion to natural gas, energy efficiency and investments in renewable energy. The draft rule will not be final until 2015, but it is already too much for power industry groups and their supporters. "This will rock our economy and has the potential to trigger another recession," said Kevin Brinegar, president of the Indiana Chamber of Commerce. "There are estimates from the U.S. Department of Energy...that say electricity costs could increase by as much as 80-percent."

That figure is also prominent in new ads run by the National Mining Association. It was taken from Congressional testimony in February by an assistant Energy secretary, though the secretary was referring to the potential cost of a reduction in carbon emissions of 90-percent or more, well below the 30-percent mandated by the rule. That cost increase was also assuming plants would have to pay to install "clean coal" technology to meet the emission reductions, rather than potentially use other methods as outlined in the EPA rule. "Is the state going to invest in a diverse mix of clean energy alternatives, things that don't have volatile fuel costs associated with them like coal and gas? Or will it keep doing what it's doing and building a bunch of expensive coal plants," asked Bruce Nilles of the Sierra Club's 'Beyond Coal' campaign.

Most elected officials in both parties criticized the proposed rule since Indiana generates more than 80-percent of its power with coal and because the industry donates heavily to their campaigns. “Once again, the Obama Administration is advancing its anti-coal agenda without regard for the impact on the U.S. economy or American workers," said Governor Pence in a statement emailed from his office. “The president and Democrats in Congress tried to force these rules through in 2009 with their cap and trade scheme. I opposed them then, and I oppose them now."

Pence also cited the numbers in the National Mining Association ad on what they believe would be the jump in electricity rates. Not true, say environmental groups. "The policy will allow maximum compliance options; it will allow Indiana to significantly reduce its energy consumption through a significant expansion in energy efficiency -- which will lower, not increase electricity bills," said Jesse Kharbanda with the Hoosier Environmental Council.

Brinegar says regardless of the level of increase, it is impossible to issue a regulation without some cost to industry, and if electricity costs rise at all, that cost is passed along to everyone. "We are the most manufacturing intensive state in the country, so we use a lot of electricity to make the products that we export to bring wealth back into our state," Brinegar said. He and other opponents of the rule also argue that the rule would not lead to an actual reduction in global carbon emissions, since China and India are boosting their use of coal to generate electricity. Environmentalists believe the U.S. should lead the rest of the world by example. "Today is about showing what clean energy can do, and it really sets the stage for future collaboration (with India and China) to get the job done," said Nilles.

Indiana's Senators, Republican Dan Coats and Democrat Joe Donnelly, both signed a letter to EPA administrator Gina McCarthy, asking for an extended public comment period on the rule - both Senators oppose it's implementation.

Indianapolis Power and Light says it is still reviewing the new rules to determine their impact, but adds that it is already making improvements to its coal plants.  "Based on IPL’s current plans, GHG emissions will have been reduced by 20%  in 2017 compared to 2005.  Our plans to refuel two units at Harding Street from coal to natural gas will reduce CO2 emissions by 50 percent in those units," said IPL spokeswoman Brandi Davis-Handy.

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