Climate change – heat waves, water shortages, and reduced flexibility – poses huge risks for electric utility infrastructure.
The Art of the Plausible
Prospects for clean energy legislation in 2011.
plant shutdowns), and perhaps other rules as well, including coal ash and 316(b). This approach probably offers the best opportunity for an orderly transition to a cleaner generation fleet, and would provide greater certainty as to requirements and time frames. However, many Democrats likely will oppose any legislation that makes the expected EPA rules less stringent. Hence, it remains very uncertain whether such legislation will be entertained, or whether the Obama administration will agree to negotiate the issues.
Room for Compromise
While prospects for agreement on any significant, energy legislative package seemed dim following the November elections, recent events suggest that prediction may have changed, if only a little. Most notably, the administration’s decision to vocally push for a CES gave new life to that possibility. The Senate has long been open to the possibility of a CES, although that body has never agreed upon specifics. The House, on the other hand, seems very disinclined to adopt a new, broad and expensive federal mandate.
However, the juxtaposition of that sentiment with the strong desire in the House to eliminate EPA’s authority to regulate GHGs under the CAA, and to address perceived overregulation of the energy sector—positions generally opposed by the administration—provide, at least conceptually, room for bargaining.
1. A “combined energy standard,” or “clean energy standard” (both a CES), is a mandate that electric power companies provide a certain defined (and increasing) percentage of power from whatever energy sources are defined as clean by the legislation. It largely functions like a renewable energy standard, but differs from one primarily based on the addition of other qualifying energy sources beyond traditional renewables like wind or solar.
2. Katie Howell, “Reid Confident Bingaman, Murkowski can craft CES,” E&E News PM , Feb. 16, 2011.
3. Sen. Jeff Bingaman, “Other World Powers Out Ahead on Energy,” The Hill , Feb. 14, 2011.
4. See Katie Howell and Jean Chemnick, “Lugar Preparing Bill that Could Include CES,” Environment & Energy Daily, Feb. 11, 2011.
5. Rep. Fred Upton, “Government’s Red Tape Tangles Up Fuel Sources Right in our Backyard,” The Hill , Feb. 14, 2011.
6. Jean Chemnick, “Graham Weighs Legislative Strategy on Energy, Climate,” E&E News PM , Jan. 28, 2011.
7. North American Electric Reliability Corp., 2010 Special Reliability Scenario Assessment: Resource Adequacy Impacts of Potential U.S. Environmental Regulation , October 2010.
8. EPA Regulations, Plant Retirements, and Impacts on Power Plant Valuation Webinar , ICF Publications, October, 2010.
9. Anthony Lacey, “Carper Puts Onus on Utilities to Unite on Push for ‘Multipollutant’ Bill,” Inside EPA , Feb. 14, 2011.
10. Both Senate proposals ultimately reached 50 percent of new clean energy by 2050.
11. These diverse energy sources would have included advanced coal generation, biomass, coal mine methane, end-user energy efficiency, efficiency savings in power generation, geothermal energy, landfill and biogas, marine and hydrokinetic energy, qualified hydropower ( i.e., incremental capacity or efficiency improvements made up to three years prior to enactment), qualified nuclear ( i.e., placed in service on or after date of enactment), solar, waste-to-energy, wind, and