FOR IMMEDIATE RELEASE: August 3, 2015
Steve Patterson, 501-537-0190, firstname.lastname@example.org
Ken Smith, 501-912-1090, email@example.com
Little Rock, August 3, 2015: AAEA issued the following statement in response to the Environmental Protection Agency’s final rule for carbon emissions from the electric power sector. As more facts become known, particularly about the final rule’s emissions targets for Arkansas, AAEA will respond further:
“With the Clean Power Plan now final, the question is not whether to reduce carbon emissions from the electric power sector in Arkansas but how,” said Steve Patterson, executive director of the Arkansas Advanced Energy Association (AAEA). “The Clean Power Plan doesn’t require anything new but it does require us to do more of what we are already doing.”
“By building on existing trends in the use of advanced energy technologies such as renewable energy and natural gas electricity generation by state power companies, Arkansas will be able to lower costs, improve reliability, and increase consumer choice as it reduces emissions,” Patterson said. “These and other technologies like demand response and energy efficiency represent the present and future of energy generation and consumption in the U.S. AAEA and its member companies are part of a $2.8 billion industry in the state that stands ready to help Arkansas regulators develop a plan that meets EPA’s target for our state and improves electric power service for business and residential customers at the same time.”
Patterson said that while AAEA views the Clean Power Plan as an opportunity to modernize the state and national electric power system, the organization is disappointed in at least three outcomes in the final rule:
1) The final rule pushes out the first emissions reduction requirement to Jan. 1, 2022 instead of the proposed date of Jan. 1, 2020. There was considerable data indicating that states could have deployed proven advanced energy technologies to meet EPA’s proposed targets in 2020 in a cost-effective way. AAEA will encourage Arkansas regulators to take the opportunity to fully integrate these technologies into the grid as soon as possible to get maximum credit for these resources when the initial compliance period begins in 2022.
2) There is a new Clean Energy Incentive Program for renewable energy deployed from 2020 to 2022 and double credit for energy-efficiency projects in low-income communities. AAEA is pleased with these new incentives but regrets that states will still receive no credit for actions taken between now and 2020 and that not all energy efficiency programs are eligible for the new incentives between 2020 and 2022. These are missed opportunities in the short term but the incentives will send an important signal for long term development of renewable energy.
3) Energy Efficiency is removed as a building block in the Best System of Emission Reduction (BSER) recommendations to states. AAEA strongly believes that energy efficiency is a valid tool for carbon emission reduction and should still be strongly considered by Arkansas for its compliance plan. What matters to our companies is the size of the market opportunity that can be addressed by energy efficiency technologies, not how they are calculated.
The final rule also extends the time states have to craft plans, requiring an “initial” state plan by Sept. 6, 2016, and a “final” state plan two years later by Sept. 6, 2018.
Today, the Environmental Protection Agency (EPA) released the final rule for carbon emissions from existing power plants under Section 111(d) of the Clean Air Act, commonly referred to as the Clean Power Plan (CPP). The CPP sets state-by-state targets for emission reductions, but allows states to develop their own compliance plans. The state targets are based on what EPA determined to be the “best system of emission reduction” (BSER). In the final rule, EPA based the BSER on state-specific potentials for emission reductions on a set of “Building Blocks” that include both traditional smokestack controls as well as “beyond the fence line” measures. Although emission rate targets are set by the building blocks, there is no requirement that states use those specific measures for compliance
The CPP presents an opportunity for states to modernize and upgrade their electricity systems by allowing them to draw from a range of advanced energy technologies and services, including energy efficiency, demand response, energy service company (ESCO) projects, natural gas, wind, solar, smart grid, nuclear power, fuel cells, combined heat and power, and transmission and distribution system efficiencies. Used together, these technologies and services create and maintain a high-performing energy system—one that is reliable and resilient, diverse, cost-effective, and clean—while also enabling new customer services.
Earlier this year, the 90th General Assembly and Governor Hutchinson adopted Act 382, which retains a legislative oversight that was approved by voters by constitutional amendment in 2014 and creates an air quality rule making procedure through Arkansas Department of Environmental Quality and its appellate and rule-making board, Arkansas Pollution Control and Ecology Commission (APCEC). Once ADEQ and APCEC have prepared and approved a rule under the agency’s administrative procedures, the Legislature through its Legislative Council will review the rule. The Governor retains his executive prerogative and can release a compliance plan on his own volition should the state be at risk of missing deadlines or having imposed on it a federal compliance plan.
Well before issuance of the final Clean Power Plan rule, several developments are occurring in Arkansas that will reduce carbon emissions, create jobs and lower energy costs for Arkansas consumers. Here are a few examples:
- Arkansas Rural Electric Cooperatives have now accumulated PPAs for a total of 309 MW of Oklahoma wind energy – http://www.aecc.com/renewable-resources/wind-energy
- AEP SWEPCO has accumulated PPAs totaling 469 MW of wind energy although it is difficult to determine how much is deployed to Arkansas-only customers – http://www.aecc.com/renewable-resources/wind-energy
- Entergy Arkansas (EAI) has announced plans to develop an 81-MW solar generating plant in Arkansas – http://www.law360.com/articles/643533/entergy-nextera-team-up-for-81-mw-ark-solar-plant
- In EAI’s testimony in April, 2015 requesting approval from APSC for the Solar Power Purchase Agreement, the company indicates “it is possible” that EAI will retire some or all of its 1031 MW of coal generation before the PPA expires: see page 23 of testimony by H. Matt Wolf – http://www.apscservices.info/pdf/15/15-014-u_14_1.pdf
- Arkansas Rural Electric Cooperatives agreed to purchase enough power generated by a 12-MW solar plant developed by Silicon Solar for U.S. defense contractor Aerojet Rocketdyne in South Arkansas to supply electricity to 2400 homes – http://www.rocket.com/article/aerojet-rocketdyne-arkansas-electric-cooperative-corporation-and-ouachita-electric
- Entergy Arkansas and two other Entergy subsidiaries recently purchased the region’s largest natural gas combined cycle electric generating plant. The 1,980-MW Union Power Plant has been generating at 25-30% capacity – http://www.nola.com/business/index.ssf/2014/12/entergy_to_buy_arkansas_power.html
- Finally, the Plains & Eastern Clean Line is a high density DC Voltage wind transmission line originating in the Oklahoma panhandle and stretching across Oklahoma and Arkansas to West Memphis. It includes a 500-MW converter station near Russellville, AR. The transmission line is in a federal permitting process and construction could be completed within 10 years – http://www.plainsandeasterncleanline.com/site/home
Arkansans Support EPA’s Clean Power Plan according to a poll by Impact Management Group commissioned earlier this year by the Arkansas Advanced Energy Foundation, 67 percent of Arkansans support the Clean Power Plan both before and after hearing arguments for and against it. See a briefing on the poll here: http://www.arkansasadvancedenergyfoundation.org/files/dmfile/AAEF.PPT.pdf
The Clean Power Plan and Arkansas’s Electric System
Prior to release of the final Clean Power Plan AAEA released a background summary document, “The Clean Power Plan and Arkansas’s Electric System”. The report shows that Arkansas is well on its way to reducing emissions and meeting targets, and has an opportunity to modernize its electric grid for the benefit of consumers and the economy in the course of complying with the EPA rule. http://arkansasadvancedenergy.com/index.cfm?objectid=51651100-2FCC-11E5-BAC80050569A5318
Arkansas Advanced Energy Association is a business group dedicated to growing Arkansas’s economy by expanding our energy workforce and manufacturing base through the increased development, manufacture, and utilization of advanced energy technologies. www.arkansasadvancedenergy.com
The Arkansas Advanced Energy Foundation is the educational affiliate of the AAEA. The Foundation promotes greater public understanding of advanced energy in Arkansas through research, public education programs and economic and workforce development. The Foundation is dedicated to informing the energy policy debate with well-researched, fact-based data on the advanced energy economy in Arkansas and by providing a public forum where state leaders can address Arkansas’s energy challenges for the future. www.arkansasadvancedenergyfoundation.org
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