As Missouri fights Clean Power Plan, regulators mull compliance approach

By Jeffrey Tomich

JEFFERSON CITY — Missouri air regulators are “close to 100 percent” certain they’ll opt for a mass-based strategy to comply with U.S. EPA’s Clean Power Plan, which requires the state to slash carbon dioxide emissions by more than a third by 2030.

The declaration came from Kyra Moore, director of the Air Pollution Control Program for the Missouri Department of Natural Resources, during the agency’s second stakeholder meeting on the Clean Power Plan.

Missouri regulators are leaning heavily toward a mass-based strategy mostly because it is the preference of electric generators in the state that will ultimately have to comply with the plan, Moore said. Also, a mass-based program is simpler than the alternative rate-based plans, and one with which regulators are already experienced.

The decision to choose mass- or rate-based compliance approaches is seen as the key “threshold decision” facing states as they formulate plans to slash CO2 emissions under the Clean Power Plan.

Under a mass-based compliance approach, power plants in a state are allowed to emit CO2 up to a specified cap. Under the alternative rate-based approach, states would have to reduce emissions to a certain level, or rate, per megawatt-hour of electricity generated.

Mass-based plans are seen as preferable among many state regulators and utilities throughout the Midwest (EnergyWire, Oct. 20). That’s especially true in coal-dependent states such as Missouri because retirements of aging, less-efficient units that are occurring regardless of the EPA rule can be counted toward compliance.

Moore said the Clean Power Plan will affect 21 power plants in the state and 47 individual electric generating units. Of those 21 plants, owners of six have announced plans to retire the sites or convert them to natural gas.

Yesterday’s meeting, which focused primarily on the Clean Energy Incentive Program, was the second stakeholder meeting hosted by the Missouri DNR since EPA issued the final rule on Aug. 3. It drew about 100 people, including utility executives, environmental and clean energy advocates, and representatives of big industrial energy users.

It was the first meeting since state Attorney General Chris Koster (D) joined other states in filing a lawsuit challenging the Clean Power Plan, which requires Missouri to slash the rate of carbon dioxide emissions by 37 percent by 2030, with initial reductions beginning in 2022.

Moore said it is not the job of state air regulators to speculate on the outcome of the lawsuit, which won’t affect the department’s approach to developing a compliance plan.

“The legal challengers will do their thing, and we will adjust accordingly if we have a stay or a vacatur,” she said. “We definitely see this as two parallel paths.”

Moore also cited a letter to Koster from the state’s investor-owned utilities, electric cooperatives and municipal utilities earlier this year. While the utilities urged him to file a lawsuit, they also vowed to continue working with the DNR to develop a state compliance plan rather than risk being subject to a federal plan.

“Most of the citizens of Missouri and the affected sources want us to write a plan,” she said.

State looks for extension

DNR expects to propose an initial compliance plan sometime next spring in time for a public hearing required and a vote by the Missouri Air Conservation Commission, Moore said.

The EPA rule requires an initial plan by Sept. 6. But Missouri will ask for two additional years to submit a final plan.

“We will request an extension,” she said. “We will not have a plan done by September 2016.”

Legislation passed by the General Assembly this year requires state regulators to prepare a Clean Power Plan impact report in collaboration with other state agencies, including the Public Service Commission (EnergyWire, Sept. 24). The report must be submitted to the governor, a legislative committee, and House and Senate leadership 45 calendar days before the final compliance plan is sent to EPA.

Among the requirements, the report must include a study of the economic impact on business and citizens and job gains or losses; the cost efficiency of any technology that may be needed to achieve the carbon-reduction goals and whether the reductions are achievable in the given time frame; and the remaining life of any affected power plant.