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The power play that is behind the Clean Power Plan

Sep 30, 2015 | 07:17 PM | Dan Israeli

Tags  Clean Power Plan, Environment Protection Agency, EPA, Obama, American Iron and Steel Institute, AISI, Aluminum Association, Heidi Brock coal


The Clean Power Plan (CPP), and all 1,560 pages of its guidelines and timelines, was officially signed and released by the Environmental Protection Agency (EPA) under the Obama Administration in August.

The sweeping policy aimed at significantly reducing carbon emissions from power plants across the nation was met with criticism, skepticism and celebration from industry leaders, politicians, environmentalists and other interested parties vocal in the public policy arena. Reactions came throughout August and September.

The American Iron and Steel Institute voiced its opposition, citing how the essential “rule” of the Clean Power Plan—requiring all U.S. electricity generating utilities to collectively cut carbon dioxide emissions by 32 percent in a 25-year span—will cripple the U.S. steel industry with higher electricity costs and stricter environmental standards in comparison with other steelmaking nations, such as China.

The sentiment was shared by the Aluminum Association, which said that it is “critical that these decisions are made in a global context,” when referring to the Clean Power Plan’s goal of reducing greenhouse gas emissions.

“The aluminum industry remains committed to the continued availability of reasonably and predictably-priced power as a cornerstone of American manufacturing,” Heidi Brock, the Aluminum Association’s president and chief executive officer, said in a statement. “Regulations that increase the cost of electricity hurt our global competitiveness and drive aluminum production to high-carbon regions overseas.”

Brock noted that the “carbon impact” of producing primary aluminum in North America has dropped by 37 percent in the past 20 years, as an example of the industry reducing its own carbon footprint.

The U.S. coal industry stands to feel the most direct impact of the policy, since coal is the highest energy source for electricity generation in America at 39 percent, followed by natural gas at 27 percent, according to the U.S. Energy Information Administration.

The National Mining Association (NMA), which represents the interests of the coal industry, filed a request with the EPA to stay the rule, so that courts can “determine the lawfulness of the agency’s attempt to commandeer the nation’s electric grid.”

“Independent studies have shown that the CPP is an energy tax on American consumers, with low-income households and seniors being the hardest hit,” an NMA late-summer statement on the issue said. “According to NERA Economic Consulting, the CPP will cost $366 billion and bring double-digit electricity-rate increases to 43 states. Another study from the National Rural Electric Cooperative Association found that a 10-percent increase in electricity rates would destroy an average of 882,000 jobs annually between 2020 and 2040.”

Many opposed to the Clean Power Plan, including Senate majority leader Mitch McConnell (R., Ky.), have questioned the legality of the rule and whether the EPA is overstepping its boundaries in determining how states manage their electrical grids.

A fact sheet released by the White House said the plan “ensures grid reliability” by giving states enough time to develop their own tailored implementation plans so that every state is in compliance by 2022.

The fact sheet also addressed the coal industry in relation to the 2016 federal budget, noting that the administration will “invest in workers and jobs, address important legacy costs in coal country and drive the development of coal technology.”

The Clean Power Plan will also provide resources for job training and job creation, as well as other services for workers and communities impacted by layoffs at coal mines and coal-fired power plants, the White House said.

One group that has supported the EPA during the evolution of the plan is the United Steelworkers union, which had worked with the agency to “highlight key concerns” with the original proposal last June and is currently assessing changes made to the finalized plan.

“It is essential that the final rule achieves its intended goal of reducing our nation’s emissions of carbon dioxide, and capitalizes on the broader potential of maintaining and creating jobs across the nation in the energy and manufacturing industries,” Leo W. Gerard, president of USW International, said in a statement.

“The USW is committed to helping design state implementation plans that balance the need to address climate change with the need to ensure that U.S. workers and industries are not unfairly hurt in the process.”



 

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