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Deadline nears for state, utility power-plan comments

by Emily Walkenhorst | January 10, 2016 at 3:20 a.m.

Arkansas environmental and energy officials will submit their final comments this month on the federal Clean Power Plan, the Environmental Protection Agency's new rule to enforce more stringent standards on coal plants and carbon dioxide emissions.

President Barack Obama's administration designed the Clean Power Plan to address climate change goals. The emissions reduction called for in the plan amounts to a small percentage of the worldwide goal of limiting warming to no more than 2 degrees Celsius, or 3.6 degrees Fahrenheit.

The EPA has set emission-reduction goals for each state -- 36 percent for Arkansas -- but the details on how states will reach those goals are subject to comment until Jan. 21.

A policy analyst with Duke University's Nicholas Institute for Environmental Policy Solutions told Arkansas stakeholders at a meeting last week in Little Rock that as many as 300 aspects of the Clean Power Plan have been subject to comment since the plan was published in the Federal Register in October.

Stakeholders continue to discuss the state's electrical-power future and concerns about the costs to utilities that will be passed on to consumers. Some were optimistic last week that the state will be able to nearly reach its early goals using already planned investments in lower-cost, lower-emitting technologies.

Eddy Moore, administrative law judge for the Arkansas Public Service Commission, said at the stakeholders' meeting Tuesday that Arkansas reduced its emissions significantly in 2014 from 2012 because lower natural gas prices increased the use of cleaner-burning natural gas instead of coal.

Natural gas produces less than half of the carbon-dioxide emissions of coal, according to the U.S. Energy Information Administration. The EPA used 2012 as the base year in calculating many of the goals set in the Clean Power Plan.

If Arkansas has a year like 2014 in 2025, the state will be within 1 percent of reaching its compliance level without having to take any additional measures, Moore said.

David Boyd, a representative with Midcontinent Independent System Operator, which hosted the meeting, said early modeling by the company suggests that redistributing natural gas already in the energy system and moving forward with already announced projects would leave the state in good position to comply with the early goals of the Clean Power Plan.

As natural gas and renewable energy prices go down, Arkansas' electrical-generation portfolio changes accordingly. The way forward will be determined by prices, technology advances and the myriad details of federal regulations.

The state, with the encouragement of Gov. Asa Hutchinson, intends to pursue a least-cost plan to comply with the Clean Power Plan.

ELECTRICITY PORTFOLIO

In an August report, Entergy Arkansas told the state Public Service Commission that it plans to increase its output by 2,000 to 6,000 megawatts in the next 20 years, all of which it expects to reach by using natural gas, solar and wind power.

The company has already announced the purchase of 20 years' worth of solar power from a NextEra Energy Resources solar park that will be built near Stuttgart, an 81-megawatt facility. The company also has invested in a 495-megawatt share of a natural gas facility in El Dorado. In response to previous federal rules, the company has proposed closing its 1,700-megawatt White Bluff coal plant near Redfield by 2029.

Arkansas Electric Cooperatives Corp. announced last year an agreement with Aerojet Rocketdyne of Sacramento, Calif., to buy electricity at a 12-megawatt solar park at the East Camden Highland Industrial Park.

Clean Line Energy Partners, a Houston-based company, intends to reserve 500 megawatts of wind power for Arkansas via a transmission line it wants to build through Arkansas and other states for a 4,000-megawatt wind project. The U.S. Department of Energy has not yet issued a decision on the project.

While the projects could add significantly to the power grid, the electricity produced by renewable technology is not yet as reliable as that produced by fossil fuels, such as coal and natural gas.

Renewables such as wind and solar can't be used 100 percent of the time because wind is not always blowing and the sun is not always shining.

Nuclear power, which has no emissions, tends to perform best in electrical generation.

The state's only nuclear-power plant -- Entergy Arkansas' Nuclear One at Russellville -- comprises 1,823 of the 14,750 megawattage capacity (12.4 percent) in the state, but it supplied 21.6 percent of the state's electricity used in September, according to the U.S. Energy Information Administration. Nuclear One makes up less than half of Entergy Arkansas' generation portfolio but produces about 70 percent of the electricity supplied to customers, said Kurt Castleberry, director of Entergy Arkansas Resource Planning.

But the cost to produce a single kilowatt hour of nuclear power is several times higher than the natural-gas cost. Nuclear-power plants take at least a decade to build, and construction costs often outpace initial projections.

"It's not a part of the conversation [of complying with the Clean Power Plan] just because it's so costly to construct and it's so costly to get a license for it," Castleberry said.

According to the Energy Information Administration, nuclear power's actual output/capacity factor compared with its potential output in the first 10 months of 2015 was 91.4 percent. (The capacity factor refers to how often the technology is used at peak capacity.) During the same 10 months, the actual output/capacity factor of hydropower was 35.9 percent. Wind was 31.3 percent, solar photovoltaic panels were at 30.1 percent, coal was 57 percent, natural gas was 56.8 percent, geothermal was 72.1 percent, landfill gas and municipal solid waste was 66.3 percent, and other biomass was 51.6 percent.

Stricter federal standards on new coal plants require technology that isn't commercially available right now, said Kelly McQueen, assistant general counsel for Entergy Services Inc.

With natural gas prices as low as they are and expected to stay, Castleberry said, coal plants owned by Entergy Arkansas aren't even being used much of the time.

Renewable energies' success depends on developing better batteries that can save any excess electricity. The technology is fast improving and will become economical, Castleberry said.

"There's no question it will become economical," he said. "The question is when."

Environmental advocates are optimistic about renewable energy sources.

"As we move toward retiring [the] White Bluff [plant] and possibly Independence [Entergy Arkansas' power plant near Newark], I'm excited about the exponentially improving technology and efficiency of clean energy options," Sierra Club of Arkansas Chapter Director Glen Hooks wrote in an email. "Those options, coupled with the rapidly emerging battery storage technology, are quickly changing the way we think about the way power is delivered.

"The Clean Power Plan should be viewed as a real opportunity to move our state forward. If we do this right, we can meet our CO2 reduction goals in a way that creates thousands of Arkansas jobs while also improving our health and our environment."

POLICY/CLEAN POWER PLAN

So far, stakeholders have listed several priorities in the final details of the Clean Power Plan.

For example: expanding the Clean Energy Incentive Program to include projects that started before 2016; weighing the reliability of an electricity source; allowing the trade of emissions credits among states with interoperable tracking systems; and permitting modified or reconstructed electrical-generating units to retain emissions allowances for a limited time period.

Some stakeholders also have discussed factoring energy efficiency efforts into Clean Power Plan compliance and perhaps modifying the laws on solar energy production in Arkansas to permit an individual to sell excess solar electricity to the power grid at market value.

Arkansas has until Sept. 6 to submit its plan for implementing the Clean Power Plan or to ask the EPA for a two-year extension.

Stakeholders will continue to meet every other month across Arkansas until that time.

While they do so, the state will face other federal regulations that could affect power plants and possibly ratepayers' electrical bills.

The 1999 Regional Haze Rule requires that Arkansas reduce nitrogen oxide and sulfur dioxide emissions that contribute to visibility haze in national wildlife areas. A plan proposed by the EPA nearly a year ago for how the state can meet those requirements estimated the cost to utilities at hundreds of millions of dollars. That plan is being renegotiated with the Arkansas Department of Environmental Quality.

An EPA update to the Cross-State Air Pollution Rule asks Arkansas to reduce its current allowable levels of summertime nitrogen oxide emissions from power plants by 54 percent. Those emissions contribute to ground-level ozone and fine particle pollution in other states.

Metro on 01/10/2016

Print Headline: Deadline nears for state, utility power-plan comments

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