Wow!  This certainly is a new age of energy management.

At the January 29, 2015 NC Chamber Environmental Compliance conference in Durham, NC, a panel spoke on EPA’s proposed “Clean Power Rule”, which will target reducing greenhouse gas (GHG) emissions from energy generation through the use of state-by-state targeted goals. In a way, this is similar to the Federal Air Pollution standards for ambient air, where each state is required to meet the National Ambient Air Quality Standards (NAAQS) for pollutants such as SO2, NOx and others. For the Clean Power Rule, each state’s GHG target will be measured in units of pounds of CO2/MWh, and they, in turn, will pass on requirements to electric utilities through state regulations implemented as part of their State Implementation Plan (SIP).

Then comes the fun part.  SIP regulations will fall into a further EPA regulatory structure called “Building Block” requirements,Blog Pic 36(1)

EPA proposed an interim period for these GHG goals of 2020-2029, with final goals due by 2030 and annually thereafter. Take, for example, the state of North Carolina. The NC goal will be approximately 992lbs CO2/MWh. As far as the Building Blocks, NC has already been pursuing energy efficiency improvements for several years and now ranks at the top of the nation in efficiency of coal fired units.  Essentially, Duke Power in NC has removed most of their older, inefficient coal-fired units, leaving only the more efficient units in service. Therefore, meeting Building Block #1 of improving average heat rate for coal-steam-electric generating units by six percent may be very difficult.

Building Block #2 will also be challenging, and perhaps unwise, as NC is thought to already have a healthy, diverse portfolio of electrical generation types (natural gas, coal, nuclear, hydro, etc.), and to lower that diversity to just one type, natural gas, may increase the risk of blackouts/ brownouts from fuel interruptions or similar issues.

Building Block #4 is based not on how NC generates electricity but how they use it.  The example given at the conference was that North Carolina could require a more energy efficient lightbulb in Seattle, which would allow the utility to claim an associated GHG reduction credit in NC. Needless to say, the details have not been worked out here.

It seems 2015 will bring many more comments and regulatory trial balloons on “Clean Power” rule development.  It will be interesting to see what’s left over at the end.