Power Plant Rule is Delayed

Reuters reports that efforts by U.S. regulators to cut air pollution from coal-fired power plants faced a setback on Friday when a federal appeals court issued a last-minute order delaying their January 1 implementation.

The U.S. District Court of Appeals granted a request to stay the Environmental Protection Agency's (EPA's) Cross-State Air Pollution Rule (CSAPR) pending further court review.

The EPA finalized the rule in July, setting much stricter limits on sulfur dioxide (SO2) and nitrogen oxide emissions from power plants in 27 states to protect the health of residents in states downwind from the emissions.

Power generators said the January 1 implementation date was too soon to allow the design and installation of pollution control equipment to meet the rule, forcing a number of units to shut or to run only part of the time.

The group responsible for keeping the U.S. power grid reliable has warned that the cumulative impact of the EPA's rules could create power problems in Texas and New England.

Proponents of stricter rules say the industry can adapt and maintain that the costs of implementing the rules will be offset by savings from reduced healthcare expenses.

The EPA estimated that the Cross State rule will save up to 34,000 lives, prevent 15,000 heart attacks and prevent 400,000 asthma attacks each year, providing $120 billion to $280 billion in annual health benefits for the nation.

Texas challenged the EPA rule because the state was included in the final version without having an opportunity to provide input on its impact in Texas. State regulators who met later with EPA officials said the agency used faulty assumptions about the state's power grid.

Electric Grid in Texas Faces Multiple Challenges

The following was gleaned from an article in the December 23 New York Times.

Electric Grid in Texas Faces Multiple Challenges

The state’s electric grid operators are coming off a tumultuous year, one they are not eager to repeat. In February, a deep freeze knocked numerous power plants out of commission as equipment broke, causing rolling blackouts across the state. Then the hottest summer on record spurred repeated conservation warnings, as grid managers worked — successfully — to avoid more blackouts.

While experts do what they can to check the skies and the temperature, grid operators are facing a tougher line of questioning about their ability to keep power flowing smoothly. A report last month by the North American Electric Reliability Corporation cited “significant concerns” about whether Texas would have enough power plants in the near future.

Regulators, eager to avoid blackouts at all costs, want to encourage construction of more power plants to meet the needs of a growing state. But consumer advocates fear this could mean higher electricity prices. Environmentalists are lobbying instead for more focus on energy savings.

Environmentalists argue that the strains on the grid should spur Texas to work on energy-saving strategies. In particular, they are pushing a program called demand response, in which businesses and consumers are paid to reduce power at times of high demand, like late summer afternoons.

The utility commission is looking at expanding Texas’s demand-response capabilities next year, helped by the continuing rollout of smart meters.

Robert King, president of the Austin consulting firm Good Company Associates, said two of his energy clients planned on beginning demand-response programs in Texas next year for the first time.

The commission is also considering regulatory changes that should make storing electricity in batteries easier.

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KCP&L Plan Shifts to Efficiency

The following excerpt is from an article in today's Kansas City Star about a local electric utility, Kansas City Power and Light (KCP&L), that is making energy efficiency a part of its business model.  Previously, KCP&L's energy efficiency efforts were done primarily for public relations.  But a new Missouri law makes it profitable for KCP&L to pursue energy efficiency seriously.

The following excerpt gives an idea of what the article is about.  More details are available in the complete article.

KCP&L plan shifts to efficiency, seeks payback for saving energy

By STEVE EVERLY

The Kansas City Star

Friday, December 23, 2011

Kansas City Power & Light, in a historic shift for the utility, filed plans Thursday with Missouri regulators to sell less electricity.

The company, like other utilities in the region, has depended on selling electricity to recover its costs and earn a profit. Building more power plants was the gauge for its success. Its conservation efforts, such as rebates to customers for buying energy-efficient air-conditioners, were pilot programs and not part of KCP&L’s long-term plans.

But the company says it’s time for a change, for energy efficiency to take on a more serious role. So its latest plan takes advantage of new Missouri regulations that make it possible for utilities to curb consumption and not be penalized financially.

And customers, though they might pay higher rates initially to help cover the upfront costs of conservation efforts, are expected to eventually see lower rates after the efficiencies start paying off.

The combination, say the utility’s officials, convinced them that for the first time energy efficiency should have an official place in its business plans.

The plan, as conceived, would ensure a sustained program that includes rebates for commercial and residential customers who buy energy-efficient equipment and lighting. There would also be rebates for disposing of inefficient air-conditioners and refrigerators. Other programs include telling residential customers how their electric usage compares with others in similarly sized homes, and what can be specifically done to reduce consumption.

KCP&L would give the program $25 million a year, which would be expected to eventually save the utility much more than that. The rule of thumb is that it costs one-fifth as much, or less, to eliminate the need for a kilowatt of electricity as it does to produce that much electricity. So the savings could amount to hundreds of millions of dollars over a few years.

A problem in the past has been figuring out how to encourage utililty convervation efforts, because they reduce electricity sales and thus cut into revenue. In addition, utilities haven’t always been able to build the costs of conservation efforts into their electricity rates.

But in 2009, state legislators passed the Missouri Energy Efficiency Investment Act, which called for treating investments in curbing consumption in the same way as investments to deliver electricity. It took a couple of years to work out the regulations to put the law into effect, including how to measure energy savings.

(Archive Article) Green Power's High Cost Scuttles Projects

The following was gleaned from a New York Times article with the above title published on or about November 8, 2010.

Electricity generated from wind or sun still generally costs more — and sometimes a lot more — than the power squeezed from coal or natural gas. 

Prices for fossil fuels have dropped in part because the recession has reduced demand. 

In the case of natural gas, newer drilling techniques have opened the possibility of vast new supplies for years to come.

The gap in price can pit regulators, who see their job as protecting consumers from unreasonable rates, against renewable energy developers and utility companies, many of which are willing to pay higher prices now to ensure a broader energy portfolio in the future.

In April, for example, the state public utilities commission in Rhode Island rejected a power-purchase deal for an offshore wind project that would have cost 24.4 cents a kilowatt-hour. The utility now pays about 9.5 cents a kilowatt hour for electricity from fossil fuels.

The state legislature responded by passing a bill allowing the regulators to consider factors other than price. The commission then approved an agreement to buy electricity from a smaller wind farm, although that decision is being challenged in the courts.

Companies that make solar cells and wind machines argue that a national energy policy is needed to guarantee them a market that will allow their industry to develop.

The United States has relied on a combination of state renewable energy mandates and federal tax credits to encourage greater reliance on energy from renewable sources. Legislation that would have set a price on carbon-dioxide emissions and included a standard for increasing the share of clean energy in the nation’s electricity portfolio failed in Congress this year.