The Biden administration unveiled highly-anticipated regulations targeting fossil fuel-fired power plant emissions in an action it said would improve public health, but lead to higher electricity prices.
The new carbon pollution standards — published Thursday morning by the Environmental Protection Agency (EPA) — would mainly impact coal- and natural gas-fired power plants and curb carbon dioxide emissions by about 617 million metric tons through 2042, the equivalent carbon footprint of 137 million passenger vehicles, according to the agency.
EPA’s regulations are projected to have “climate and health benefits” worth $85 billion and reduce ther amount of air pollutants and soot in the air.
“By proposing new standards for fossil fuel-fired power plants, EPA is delivering on its mission to reduce harmful pollution that threatens people’s health and wellbeing,” EPA Administrator Michael Regan said in a statement. “EPA’s proposal relies on proven, readily available technologies to limit carbon pollution and seizes the momentum already underway in the power sector to move toward a cleaner future.”
JOE MANCHIN THREATENS TO OPPOSE BIDEN NOMINEES OVER UPCOMING POWER PLANT CRACKDOWN
The announcement acknowledged that the standards call for “ambitious reductions in carbon pollution,” but stated those reductions could be achieved by power companies with proven and cost-effective control technologies applied directly to power plants with a negligible impact on retail electricity prices. The EPA particularly touted costly carbon capture and clean hydrogen technology.
However, according to the EPA’s regulatory impact analysis of the standards, the rules are expected to lead to retail electricity prices increasing 2% and prices of natural gas delivered to power sector increasing 9% on average nationwide by 2030. The of Henry Hub spot price, widely considered the benchmark tool to measure the U.S. natural gas market, is expected to increase 10% in that same time span.
While the standards impact both coal and natural gas plants, the impact analysis filing projected the coal industry would bear the brunt. Under the proposal, the EPA said U.S. electric generation derived by coal plants without carbon capture will decline 67% by 2030 and 100% by 2035, while coal plants with carbon capture 29% and 13%, respectively.
“Coal power plants are one of our most dependable and affordable sources of electricity,” Michelle Bloodworth, the president and CEO of America’s Power, a coal power trade group, said in a statement Thursday. “Unfortunately, EPA’s proposed carbon rule is at least the third rule EPA has issued within less than two years that is designed specifically to cause the premature closure of coal power plants.”
“The proposal raises a number of critical legal questions, including whether EPA has the authority to force the use of technologies that are not economically or technically feasible for widespread use,” Bloodworth continued. “One of the consequences of prematurely retiring coal plants is to exacerbate the risk of power outages.”
Bloodworth added that the EPA should modify its proposal to avoid premature coal retirements rather than “speed up retirements and jeopardize grid reliability.”
She noted that all four members of the Federal Energy Regulatory Commission recently expressed concern about the early retirement of coal-fired power generation, during a Senate hearing. Commissioner James Danly said he feared the impacts of forced retirements “are going to be catastrophic.”
And in December, North American Electric Reliability Corporation — an independent organization that monitors the national grid and makes periodic recommendations to boost reliability — said large swatch of the country were facing high or elevated risk of capacity shortfalls as a result of early fossil fuel retirements.
Overall, there are 3,393 fossil fuel-fired power plants nationwide, the majority of which are natural gas plants, according to the most recent federal data. Those plants generate more than 60% of the nation’s electricity, compared to the roughly 14% of electricity generated by wind and solar projects.
However, EPA data shows that the electric power sector accounts for about 25% of total U.S. emissions, placing it behind only the transportation sector and slightly ahead of the industrial sector, making the sector a target of Democrats and environmental organizations.
“The EPA’s proposed rule needlessly requiring carbon capture on existing coal and gas-fired power plants is more far-reaching than even the Clean Power Plan was,” Jason Isaac, an energy expert at the Texas Public Policy Foundation said ahead of the EPA announcement. “Carbon capture technologies are so expensive that the result will be the sudden retirement of reliable generation, and there will be nothing to replace it.”
“This is a prime example of an unelected executive agency run amok, with a single-minded agenda of eliminating fossil fuels and controlling how we produce and consume energy regardless of the costs or consequences, all while doing nothing to mitigate a changing climate,” Isaac added.
The proposal is also likely to face legal challenges from Republican-led states and industry groups. The U.S. Supreme Court ruled in June 2022 that an Obama-era rule limiting power plant emissions under the Clean Air Act was unconstitutional, since Congress never granted the EPA the explicit power to issue such regulations.
Meanwhile, Sen. Joe Manchin, D-W.Va., who holds a key vote in the Senate where Democrats have a slim 51-49 majority, said Wednesday he would withdraw support from all of President Biden’s EPA nominees if he moved forward with an aggressive version of the rule.
Regan is set to officially unveil the regulations at an event in Maryland where he will be joined with climate activists and lawmakers.
