Proposed EPA Regulations Will Raise Rates, Affect Reliability

Proposed EPA Regulations Will Raise Rates, Affect Reliability

Little Rock, Ark. — Nov. 8, 2013 — Electric Cooperatives of Arkansas leaders warned the Environmental Protection Agency (EPA) that proposed carbon reduction regulations would result in increased rates for electric cooperative members and impact the reliability of the nation’s power grid at an EPA “listening session” in Dallas on Thursday.

“Targeting electric utility generators for the majority of future carbon reductions puts an unfair cost burden on electric consumers,” Duane Highley, president and CEO of Arkansas Electric Cooperative Corporation (AECC). “We believe that any federally mandated carbon reductions should include all sectors of the economy, not just  electricity, and should reflect an equitable and proportionate share of each sector's contribution.”

He said that the EPA’s proposed regulation of carbon under section 111(d) of the Clean Air Act expressly allows only those measures that have been "adequately demonstrated and achievable" by affected generating units. “Under this standard EPA cannot require carbon capture and storage, fuel switching or revised, non-economic dispatch of the generating fleet,” he said.

Highley said policies which require the premature retirement of generating units put the reliability of the grid in jeopardy. “As states develop their compliance plans, the EPA should require them to consult with regional transmission organizations, power pools and other affected parties to assure that electric reliability is maintained,” he said.

Mel Coleman, CEO of North Arkansas Electric Cooperative, added that short compliance timelines reduce flexibility and raise the cost of energy for electric cooperative members. “The EPA should allow states adequate time and flexibility of at least six years to design programs that minimize costs to ratepayers,” he said. “The Arkansas electric cooperatives have and will always be good stewards of the environment, but the proposed regulations lack common sense. Electric cooperatives across our nation are face-to-face with people who already have trouble paying bills. Without coal-based generation in the mix, this situation will only worsen.”

Highley said approximately 27 percent of the world’s coal is located in the United States, more than any other nation. “The EPA’s meetings bypass 16 of the top 20 coal-producing states. The proposed rules in these states could force layoffs, plant closures and result in major economic harm to one of these states’ most important industries. “The 11 selected locations for the “Listening Tour” do not include most of the states that largely use coal for power,” he said.

AECC owns a portion of the cleanest and most efficient coal-based plant in the United States, the John W. Turk, Jr. Power Plant, which is also the nation’s only ultra-supercritical plant. “It is unfortunate that, while China will continue to deploy this ultra-supercritical technology, the EPA’s new unit rule will effectively prohibit the construction of this highly-efficient technology in the U.S.,” he said.

The Electric Cooperatives of Arkansas comprise 17 electric distribution cooperatives; Arkansas Electric Cooperatives, Inc. (AECI), a Little Rock-based cooperative that provides services to the distribution cooperatives; and Arkansas Electric Cooperative Corp. (AECC), a generation and transmission cooperative. The distribution cooperatives provide electricity to approximately 500,000 homes, farms and businesses in Arkansas and surrounding states.

For additional information, contact:

Rob Roedel, Electric Cooperatives of Arkansas, 501.570.2296 or rroedel@aeci.com

www.ecark.org

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