by James A. Bacon
President Barack Obama’s Clean Power Plan gives Virginia fifteen years to cut CO2 emissions by 38% from 2012 levels. Not only will the plan usher in a better world of cleaner air, bountiful “green” jobs and diminished global warming, supporters contend, Virginians will use less electricity and enjoy an 8% reduction in electric bills by 2030.
The State Corporation Commission (SCC) has nothing to say about global warming or green jobs, but the staff has commented upon the Clean Power Plan’s impact on electric bills: Rates under the plan could be 20% to 22% higher for a typical Dominion Virginia Power customer than under a business-as-usual approach. That’s on top of the 14% that electric rates have increased since 2007, including rate adjustments for lower fuel prices that took effect this month, and it doesn’t include the impact on Appalachian Power or smaller utilities.
Who’s right? Will electric bills go up or down?
What we have here is a battle of dueling experts – Obama’s Environmental Protection Agency (EPA) and its allies in the environmentalist community on the one side, and the state regulatory commission and the electric power industry on the other. Whom do we believe?
It’s hard for citizens to know. The issues are anaesthetizingly complex, and few people have the patience to wade through both sides of the issues. For each assertion that one party makes, someone provides a counter. Peel away one layer of the debate, and there always seems to be another.
That’s why God created Bacon’s Rebellion. My goal in this article is to clearly delineate the main points of contention. You may not change your mind – who ever does? — but at least you will leave with a clearer idea of what the issues are.
Because this piece is so long, I have broken it into digestible chunks. Use these links to navigate the article.
The Clean Power Plan and how it works
McAuliffe administration asks EPA to modify Virginia targets
The SCC response
SELC sides with EPA
Nukes vs. Renewables
Wholesale electricity to the rescue
Energy efficiency to the rescue
How reliable is renewable power?
The purpose of the Clean Power Plan is straightforward: It is designed to radically curtail the CO2 emissions blamed for global warming by setting CO2 targets for each state. Nationally, the plan aims to cut CO2 emissions by 30%, but state targets vary widely. Under proposed regulations, Virginia would have to slash 2012-level emissions by 38% by 2030, with a majority of the cuts occurring by 2025.
While the EPA sets targets for each state, it theoretically allows states flexibility as to how they achieve those targets. The agency provides four broad strategies, which, it contends, should achieve the goals at a reasonable cost. States can mix and match as best fits their circumstances. The strategies include:
- Make coal-fired power plants more efficient. By capturing more heat from coal combustion, coal-fired plants can generate the same amount of energy with fewer CO2 emissions. EPA says that an average “heat rate improvement” of 6% should be achievable.
- Use more natural gas. Although it is a fossil fuel, natural gas releases less CO2 per unit of energy generated than coal. The EPA expects the biggest reductions to come from switching to this fuel.
- Use more renewables and nuclear. Solar power, wind power and nuclear power release zero CO2. In the EPA’s estimation, this strategy is second only to natural gas in its potential to cut CO2 emissions.
- Conserve energy. Investing in energy efficiency reduces the demand for electricity, which means less generating capacity is needed. The EPA says it should be possible to increase demand-side energy efficiency by 1.5% annually.