Utilities, Enviro Groups Find Some Common Ground on Clean Power Plan Compliance

More than a dozen executives representing the region's largest electric generators discussed compliance strategies during a daylong conference Friday at a Detroit hotel.  The meeting was organized by the Bipartisan Policy Center and the Great Plains Institute -- two groups working most closely with state regulators to help them vet their options.

The conference was held just weeks before EPA is expected to release the final version of the rule, starting the clock for states to develop compliance plans.

Among key decisions facing state regulators as they go about the task:  do they choose a rate-based standard or an optional mass-based standard?  And do they act alone or work with other states?

Officials from utilities including American Electric Power Co. Inc., Duke Energy Corp. and DTE Energy Co., the region's grid operator, as well as representatives from the Natural Resources Defense Council and Union of Concerned Scientists, agreed Friday that, with limited exceptions, a mass-based standard is simpler and easier to implement.

There was also strong consensus that state implementation plans that enable trading of emissions allowances could reduce costs of complying with the rule.  And trading would be more easily achieved among states that adopt mass-based standards.

The views are in line with a report last month by Duke University's Nicholas Institute for Environmental Policy Solutions that showed compliance costs could be substantially lower if states work together and adopt mass-based standards.

And the Midcontinent Independent System Operator last summer said compliance costs across its 15-state footprint could be reduced by approximately $3 billion annually by taking a regional approach to curbing emissions compared to making similar cuts separately across its nine subregions (EnergyWire, Sept. 18, 2014).
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Compacts not necessary
There was also widespread agreement at Friday's conference that a formal compact or agreement among states, such as the Regional Greenhouse Gas Initiative, isn't necessary to enable trading of emissions allowances.

"I don't believe ... that you need to set up a large regional program with a lot of administration, a lot of administrative costs," said Bruce Braine, vice president of strategic analysis for AEP.

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