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When the EPA Targets Electric Utilities

By | Economy, Energy, Regulations | One Comment

The hearing today by the House Energy and Commerce Subcommittee on Energy and Power on recent EPA regulations on industrials boilers, cement manufacturing plants and utilities included strong and substantive testimony from representatives of affected industries. (Background memo) Below we’ve cited the testimony from Dirk Krouskop with MeadWestvaco on the Boiler MACT regs. In addition …

Thomas A. Fanning, the Chairman, President and CEO of  The Southern Company, testified on the Utility MACT rule. His prepared statement included this summary:

EPA has proposed Utility MACT rules under timelines that we believe will put the reliability and affordability of our nation’s power system at risk. EPA’s proposal will impact plants that are responsible for nearly 50 percent of total electricity generation in the United States. It imposes a three-year timeline for compliance, at a time when the industry is laboring to comply with a myriad of other EPA mandates. The result will be to reduce reserve margins—generating capacity that is available during times of high demand or plant outages—and to cause costs to soar. Lower reserve margins place customers at a risk for experiencing significant interruptions in electric service, and costs increases will ultimately be reflected in service rates, which will rise rapidly as utilities press ahead with retrofitting and projects to replace lost generating capacity due to plant retirements.

The solution is to allow the industry the time to make a smooth transition to the next generation of emissions control technology required by the Utility MACT standard. A more deliberate schedule for promulgating the standard, coupled with a more realistic compliance schedule, would ease the strain on the industry and reduce risks to consumers. Anything less will put at risk the economic growth and job creation that depends on reliable and affordable electricity every day of the year.

Anthony F. Earley, Jr.,Executive Chairman of DTE Energy, also focused on the EPA’s plans to further regulate electric utilities. From his prepared statement: Read More