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Congress should aim for greenhouse gas reductions in energy bills that address other topics, APPA says


From the February 25, 2013 issue of Public Power Daily

Originally published February 25, 2013

By Jeannine Anderson
Editor
Legislation addressing climate change failed in the 111th Congress, and "there appears to be no consensus on the issue today," APPA President and CEO Mark Crisson said in a Feb. 20 letter to the leaders of the Bicameral Task Force on Climate Change. "Should that change, APPA believes such legislation would need to be applied economy-wide, to all industry sectors, and would need to consider local, state, and regional initiatives that address the issue."

The letter is a response to a letter from the task force's co-chairmen, Rep. Henry Waxman, D-Calif., and Sen. Sheldon Whitehouse, D-R.I., asking for APPA's views on policy options to address climate change and emissions of greenhouse gases.

Waxman is the ranking minority member of the House Energy and Commerce Committee. Whitehouse is a member of the Senate Environment and Public Works Committee and chairs the committee's Subcommittee on Oversight.

In the absence of near-term consensus on broad climate change-specific legislation, "Congress could focus on legislation that addresses other important energy issues, but also has the collateral benefit of reducing emissions," Crisson said. "Such legislation would include bills to promote energy efficiency, streamline hydro relicensing requirements and other regulations limiting or preventing the expansion of hydro power, and to establish a permanent repository for nuclear waste." Such bills "stand a much better chance of passage in both chambers" than a big climate change bill, he said.

In a 2007 policy resolution approved by APPA's members, the association urged Congress to adopt comprehensive legislation to address climate change. "Emissions of greenhouse gases, primarily from the combustion of fossil fuels, and the linkage of those emissions to global climate change, is the most significant environmental policy issue confronting the nation," APPA said. The association went on to outline the principles APPA believes should be incorporated in any federal legislation to address emissions of greenhouse gases.

Regardless of any legislation Congress may pass that would lower greenhouse gas emissions, "the Environmental Protection Agency has the authority to regulate such emissions under the Clean Air Act (CAA), and is in the process of doing so," Crisson noted. In April 2012, the agency issued a notice of proposed rulemaking that would establish New Source Performance Standards (NSPS) for new electric generating units. 

"While APPA has some significant concerns with the proposed rule and believes it demonstrates that the CAA is ill-suited to regulate ubiquitous GHG emissions, a final rule is expected this year," Crisson said, and a proposed rule to regulate greenhouse gas emissions at existing generating units "is expected soon thereafter."

One way Congress could address climate change is by directing federal agencies to look at how their regulations affect electric utilities' ability to reduce their greenhouse gas emissions, Crisson said. Public power utilities "have been subjected to a plethora of regulations in the last couple of years, and some of these regulations have conflicting policy objectives," he said. While the EPA has issued many regulations affecting power plants, other agencies -- including the Federal Energy Regulatory Commission, Commodity Futures Trading Commission and Department of Energy -- have issued regulations that also affect the electric industry, he said. 

Some of these regulations are aimed at enhancing energy efficiency and/or bringing renewable resources to market, "but because they are not being viewed holistically in some cases, may have the unintended effect of making it more difficult for electric utilities to address climate change," Crisson said.

For example, regulations issued recently by the CFTC regarding how the term "swap dealer" is defined "make it very difficult for public power utilities to swap arrangements with third parties that allow them to address volatility in fuel prices (e.g., natural gas)," Crisson said. If public power utilities cannot enter into these agreements, it becomes more difficult for them to use natural gas as a fuel, he said. The CFTC regulations "could make it more difficult for utilities seeking to fuel switch from coal to natural gas, ironically, often as a result of the plethora of EPA regulations being imposed on coal-fired plants."

Any efforts to address climate change, whether by Congress or by a federal agency, "must recognize that CO2 emissions are decreasing in the U.S.," Crisson said. He noted that, last year alone, more than 12,200 MW of capacity -- two-thirds of which was coal-fired capacity -- were retired.

Efforts to reduce emissions should give utilities "as much flexibility as possible to reduce emissions through a variety of means, including energy efficiency and demand response programs," Crisson said. Any such efforts also "must ensure utilities can operate in a manner that maintains reliability of the electric grid," he said.

The four-page letter is posted in the Newsroom section of APPA's website.

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