Legislation Affects Your Rates
The US Supreme Court recently handed down two decisions that will ultimately impact our wholesale power cost.
One case, involving Duke Energy, a major investor-owned utility, headquartered in North Carolina, involved how emissions from power plants are to be calculated. The Clean Air Act includes a provision known as “New Source Review.” New Source Review requires industries that emit pollutants to install new pollution controls when they make major modifications to their facilities that increase the amount of pollutants they release. Under some parts of the EPA’s rules emissions are calculated on an annual basis, while in other parts of their rules calculations are done on an hourly basis.
Duke argued that their modifications did not increase the annual emissions from their plant so they were not subject to the New Source Review. Environmental Defense, which brought the suit, argued that the emissions should be calculated on an hourly basis.
On a 9-0 decision, the Supreme Court said that the calculation must be done on an hourly basis. This ruling will require that we more closely analyze the effects of any maintenance on emissions from our power plants. This may require more pollution controls to reduce the hourly emissions from our plants. We may be required to reduce the hours we operate certain plants to limit the hourly emissions. Either of these scenarios will increase our cost.
We are currently investing over a half a billion dollars on pollution controls for our power plants; any additional controls we have to install will increase that amount even more. If we are required to reduce the hours we operate our plants, we will have to purchase power from other sources most likely at a high cost.
The other decision, Massachusetts vs. EPA, was over whether the Environmental Protection Agency (EPA) had authority under the Clean Air Act to regulate carbon Dioxide (CO2) and other greenhouse gasses from automobiles. In a decision, the Supreme Court ruled that CO2 fits within the Clean Air Act’s broad definition of an air pollutant.
While the ruling covers the CO2 emissions from cars and trucks, it is reasonable to expect that under the Clean Air Act, the EPA will be able to regulate all sources of CO2 including power plants. As I discussed in last month’s article, our member’s electric usage contributes about 240,000 tons to the atmosphere annually. How we as a nation go about regulating CO2 emissions will have a dramatic impact on our energy cost.
This cost will impact us beyond just our electric bills. It will impact us in one way or another by affecting just about everything we purchase.
One benefit of this ruling is that we may see Congress act to address global warming by developing a uniform standard for greenhouse gas emissions. Uniform federal standards will remove the uncertainty that we have been dealing with in planning for future resources to meet our growing energy needs.
Over the next few months I will be sharing with you the various proposals that are being explored to address CO2 and other greenhouse gases. Because this issue will have such a huge impact on your Cooperative, I will do my best to keep you informed.
The Cooperative’s Board of Director’s has approve a bid from Jean C Wiley of Mount Pleasant for the construction of our new headquarters facility on the west side of Mount Pleasant. The approved bid was for a little over $6.5 million dollars. We are currently finalizing the contract for the project. We are planning a formal ground breaking ceremony in conjunction with our May 17th Board Meeting. Based on how the weather cooperates, we expect to be in our new facility later this winter. We will have more about our new headquarters in next month’s Highline Headlines.