While the planet warms, North Carolina tries to unplug the Clean Power Plan

While the planet warms, North Carolina tries to unplug the Clean Power Plan

- in Environment, Featured Articles
wnc-brian-stansberry-creati
Creative Commons 3.0 (Brian Stansberry)

The drought in parts of the Blue Ridge Mountains is so deep that leaf-watching, an annual ritual for thousands of tourists, has become instead an exercise in branch-watching. There is some color, sure, but stressed by the extremely dry weather, poplar, birch and cherry trees prematurely lost their leaves in late September.

All of western North Carolina, an area including 1.3 million people, has earned its place in the record books as having one of the five driest falls on record. Cherokee, Clay, Macon and Transylvania counties are experiencing an extreme drought, and if a dry winter ensues, as forecast, it could be classified as exceptional.

Meanwhile, the eastern part of the state, still healing from the effects of Hurricane Matthew, is experiencing one of that region’s five wettest falls in recorded weather history, according to state climate data.

Extreme weather conditions — more intense floods, wildfires, storms and droughts — are symptomatic of a warming planet. No longer an abstract concern for our as yet unconceived great-grandchildren, climate change is happening now, and it’s not a diabolical plot by the sun.

This human-made global threat to the planet prompted the Environmental Protection Agency in 2014 to propose a national Clean Power Plan. If it passes legal muster, over the next 15 years, the Clean Power Plan would cut carbon emissions from power plants nationwide by at least a third from 2005 levels.

The plan would accomplish this by requiring states and utilities to meet individual benchmarks for emissions reductions, primarily through decreasing their use of coal in generating electricity. North Carolina would have to cut its carbon emissions by 36 percent under the CPP, which places it roughly in the middle of all of the states’ goals.

Our state would be required to reduce its carbon emissions by 36 % by 2030. Source: National Conference on State Legislatures
Our state would be required to reduce its carbon emissions by 36 % by 2030. Source: National Conference on State Legislatures
Harrison Fell
Harrison Fell

But this would occur gradually, over eight years from 2022 to 2030. And states could choose from several options to reach their specific goals. They could mix and match with natural gas, coal, an array of renewables and energy efficiency. They could trade carbon credits and allowances with other states.

Think of it as kids exchanging food at a school lunch table: As long as everybody eats their required amount of vegetables, they can choose from corn, broccoli or beans. Or all three. Or just one.

“I see where the EPA is coming from on the states,” said Harrison Fell, associate professor at NC State University’s Center for Environmental and Resource Economic Policy. “Instead of enacting some national carbon trading policy that would have been dead on arrival, the EPA said, ‘Let’s give the states as much power as possible to meet the standard.”

But 27 states, including North Carolina, don’t want to eat their vegetables. In fact, they’re suing the EPA, saying that in doing so, the federal government is exceeding their authority under the Clean Air Act. Until the Fourth Circuit Court of Appeals rules on the oral arguments that were presented in September, the CPP is in limbo. Meanwhile, in incremental ways — from melting sea ice in the Arctic, to record-breaking heat in November, to extreme drought in the Blue Ridge mountains — the earth’s climate continues to change, for the worse.

This map shows the states' legal reactions to the proposed Clean Power Plan. North Carolina is one of 27 states suing the EPA, alleging the agency has exceeded its constitutional authority.
North Carolina is one of 27 states suing the EPA, alleging the agency has exceeded its constitutional authority.

****

NC Department of Environmental Quality Secretary Donald van der Vaart and Gov. Pat McCrory staunchly oppose the CPP. In a March 2015 testimony before the U.S. House Committee on Energy and Commerce, van der Vaart criticized the CPP as a “one size fits all solution.”

However, the CPP individualizes each state’s plan. And within that plan, states have latitude. For example, they can choose to reduce their carbon emissions based on mass or rate. To explain this using a different food comparison, a mass-based reduction is like eating fewer pounds of leftover Halloween candy. A rate-based reduction is akin to eating fewer calories from the candy. That could mean eating fewer pieces overall or eating the same amount but lower-calorie brands— just as long as you come under the benchmark.

While a state-by-state plan is politically more palatable — 21 states are not suing the federal government — “it creates some unfortunate economic realities,” Fell said. Because of the differences between states’ energy resources — some, like West Virginia rely on coal, others, like Texas are rich in wind — a patchwork approach could be more expensive on average, than a blanket reductions policy.

But the dire economic predictions presented by NC DEQ, Gov. McCrory and other CPP opponents, are overblown, according to many economists. Significant job loss in North Carolina is unlikely because of the state’s robust solar industry. Since 2012, 10,000 new clean energy jobs have been announced in North Carolina, according to Natural Resources Defense Council figures. More than 78,000 of these jobs now exist in the state.

As for the utilities, although economic models aren’t foolproof, chances are still very good that their operating costs, in North Carolina, anyway, would increase only about 1 percent. The caveat is if the price of natural gas, the main replacement for coal under the CPP, significantly increases then cost of implementing the CPP could rise to 3 percent.

David Hoppock
David Hoppock

“That’s pretty low,” said David Hoppock, a senior policy associate in the Climate and Energy Program at Duke University’s Nicholas Institute for Environmental Policy Solutions. “The cost of natural gas probably will do a lot more to determine electricity costs in North Carolina.”

Natural gas prices dropped 20 percent last month, although they’re likely to rise along with demand this winter. According to the federal Energy Information Agency, natural gas will become the predominant fuel, long-term.

“What’s really pivotal is future gas prices,” Fell said. “We’ll be able to achieve this [CPP goals] at relatively low costs if gas prices remain low.”

The state utilities commission would decide how much of the additional operating costs Duke Energy could pass on to ratepayers. But the utility already spends about $1.8 billion on importing coal each year, money that could be spent on different fuel sources. And when Duke builds new gas plants or converts them from coal plants, the cost of those improvements is dribbled out to ratepayers over decades.

It’s true that the CPP transition could be more expensive for states that rely heavily on coal. But coal’s popularity is already waning nationwide, down from 50 percent of the total fuel sources a decade ago to just 33 percent today, according to federal figures.

Duke Energy spokesman Sean Walsh said the utility is monitoring the CPP’s legal developments, but regardless, plans to retire more coal plants and invest instead in natural gas and renewable energy.

Natural gas, though, has its own environmental and social justice problems. It’s a source of methane emissions, a potent greenhouse gas, plus the pipelines often route through low-income, minority communities.

This is why many environmental advocates are pressing utilities to use more renewable energy as way of achieving their CPP goals. North Carolina’s renewable energy sector was jumpstarted in 2007. That’s when state lawmakers passed the Renewable Energy Portfolio Standard, the first in the Southeast. It requires public utilities such as Duke Energy to supply a percentage of its electricity sales via renewable sources like wind, solar and biomass, landfill gas.

Over the past decade, conservative lawmakers have tried to dismantle the REPS, so far unsuccessfully. This is likely because, in part, Duke Energy has consistently met its renewable goals of 3 percent in 2012 and 6 percent last year. At its peak, Duke will have to hit 12.5 percent in 2021.

Walsh said Duke has expanded its use of renewables to include energy from 35 wind farms in North Carolina. In the four states where it operates, the utility generated 40 percent of its electricity from wind, solar, hydroelectric and nuclear energy. Last week, it opened up a bidding process seeking 750,000 megawatt hours of renewable energy in its service territory.

Hoppock attributes renewables’ success to North Carolina’s booming solar industry, not the REPS. And Duke has expanded solar power in Florida, Indiana and South Carolina without a REPS requirement.

But Fell says that without the REPS law — regulation, as opposed to a purely market-based approach — utilities would have less incentive to deploy wind and solar. “If left to the market, that’s not going to happen here. Whether that’s good or bad, depends on how much you value the emissions avoided from renewable power.”

****

The legal argument against the CPP is based on the concept of “federal overreach,” a code word among conservatives, including Gov. McCrory, that implies an intrusion on states’ rights. In August 2015, McCrory lambasted the EPA, alleging that the new rules would raise electricity rates. DEQ has calculated the household electricity and gas bills in North Carolina would increase by $434 a year by 2020, over current rates. The CPP reductions aren’t required to begin until 2022.

On the other hand, the EPA estimates that electricity customers nationwide could pay an average of $85 less per year by 2030.

Given that North Carolina is well-poised to meet the CPP requirement by using its renewable energy portfolio and weaning itself off coal, the state’s opposition appears to be ideological, Cassie Gavin, director of government relations for the Sierra Club, said.

That does seem to be the case, judging from remarks delivered by NC DEQ Secretary Donald van der Vaart. In March 2015, he testified before the U.S. House Committee on Energy and Commerce, firing a verbal shot across the bow of climate change science:

“My comments will not address the scientific uncertainty of the impact anthropogenic greenhouse gas emissions have on climate,” Van der Vaart testified. “My comments do not discuss the accuracy, or lack thereof, of the Intergovernmental Panel of Climate Change models relied upon by the EPA to develop this rule.”

The IPCC, composed of the top climate and meteorologic scientists in the world, has published reports showing the extent of the global phenomenon: Arctic ice melts, rising seas, warmer temperatures, extreme weather. In its latest report summary, the IPCC warned that “continued emission of greenhouse gases will increase the likelihood of severe, pervasive and irreversible impacts for people and ecosystems.”

This graph shows the departure from average of global temperatures. Source: NASA
This graph shows the departure from average of global temperatures. Source: NASA

He also told the House Committee that if North Carolina did invest time and resources into enacting a state plan, the courts could overturn the CPP, and the work would be for naught. That would be a poor use of limited resources, he said. (However, the McCrory administration and state lawmakers did exactly that when they passed the Voting Rights Act and a congressional redistricting plan, which were ruled unconstitutional. Amendment One was also invalidated by the courts; HB2 is also being legally challenged.)

Donald R. van der Vaart
Donald R. van der Vaart

Van der Vaart has consistently opposed the CPP, even after the EPA relaxed some of the requirements in its final rule. The department predicts energy-intensive industries such as aluminum, steel and chemicals manufacturing would be hurt by higher electricity prices.

But Hoppock says electricity demand has been largely stagnant. This is not because fewer people are using electricity, but because our gadgets and manufacturing processes are more energy efficient. “The things the economy is producing is changing,” Hoppock said. “The efficiency of products is changing.”

NC DEQ did come up with an alternative state plan, approved by the Environmental Management Commission. But it was rejected by the EPA because it didn’t meet the carbon reductions emissions. “All it did was address improvements at power plants,” Gavin said. “No clean energy, no solar, no wind, no environmental justice aspects. They came up with it with the idea that it would fail.”

The CPP is not a perfect plan, both its opponents and environmental advocates agree, albeit for different reasons. The reliance on natural gas raises environmental and public health issues related to fracking and pipelines. The Natural Resources Defense Council and other groups have pushed for greater emphasis on renewables such as solar and wind, and energy efficiency. If North Carolina were to increase the share of clean energy past 2021, the final year of the REPS ramp up, the NRDC says, “The state would achieve the goals of the Clean Power Plan with plenty of time to spare.”

The plan is also part of the United States’ pledge within the 2015 Paris Agreement, the global accord to address climate change. Without the CPP, that agreement would be gutted of its most important centerpiece.

“What makes climate policy complicated,” Fell said, “is that the costs are borne upfront and the damage avoidance is in the future. Whether that’s happening right now or whether it’s 40, 50, 100 years down the road, as benefits are pushed into the future, it’s hard for people to wrap their heads around.”

It’s hard, yes, but not for the people of Greenland, where the ice sheet is melting. The refugees migrating from drought-stricken areas of North Africa. And closer to home, North Carolinians living in low-lying coastal areas, and even inland. Or high in the mountains, where they’re waiting for rain.