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Proposed federal rules to cut carbon dioxide emissions from existing power plants could undermine the affordability and reliability of Utah's electricity, which comes primarily from coal, according to testimony Wednesday before a legislative interim committee.
The U.S. Environmental Protection Agency failed to conduct a meaningful cost-benefit analysis of its Clean Power Plan and to seek adequate guidance from the states, said Laura Nelson, director of the Utah Office of Energy Development.
"There wasn't a good estimate of the cost of this rule to the state," she told the legislative Public Utilities and Technology Interim Committee. "What will we gain?"
Last June, at President Barack Obama's initiative, the EPA issued draft rules designed to cut climate-disrupting power plant carbon emissions by 30 percent from 2005 levels by 2030. The rule is expected to be finalized this summer.
Power generation accounts for about a third of the nation's carbon emissions.
Utah officials lambasted the 654-page plan as an "unprecedented application" of the Clean Air Act in a legally dubious effort to change the nation's energy policy.
Environmentalists applauded the rule because it encourages greater energy efficiency and development of emission-free power sources, including wind, solar and nuclear.
"We are disappointed in how Utah is reacting," said Matt Pacenza of HEAL Utah, noting that the rules build on trends already underway. "These are not hard targets to meet."
Two decades ago, the nation generated 60 percent of its power from coal. Today, that share is below 40 percent and dropping, as natural gas and renewable sources grow.
Coal releases twice the amount of carbon dioxide as natural gas per kilowatt hour generated, so dropping coal, which Utah produces, will help states meet the plan's targets.
Pacenza urged the committee to consider the impacts of carbon emissions and host a panel of scientists to talk about how climate change is affecting Utah.
"The single greatest impact is reduced snowpack. It's affecting our water supplies, our forests and our agriculture," Pacenza said. "Utah may be a small part of the problem, but that shouldn't stop us from leading and trying."
According to the EPA's math, the proposed rule could cut the nation's carbon dioxide output by 9 percent or 10 percent.
But Nelson said a 1 percent reduction is the best that could be achieved through the plan.
Although the plan seeks to reduce emissions by 30 percent from 2005 levels, it establishes 2012 as a baseline year for Utah, according to Nelson. That means, she said, the state gets no credit for efficiency gains achieved in prior years at its coal-fired plants.
The plan requires Utah to cut emissions based on a rate-based formula, rather than an absolute number. For example, the EPA estimates Utahns' power released 1,813 pounds of carbon dioxide per megawatt hour produced in 2012, Nelson said. The 2030 target would be 1,322 pounds. But that number is based on faulty data, and getting there could boost electric rates, she said.
Utahns enjoy low electrical rates of 8.2 cents per kilowatt hour — 19 percent less than the national average.
Nelson's remarks echo comments Gov. Gary Hebert submitted last December. His office cited a study that pegged the cost of compliance at between $41 billion and $74 billion a year.
The EPA contends the plan could reduce power rates by promoting efficiency and would result in reduced particulate, nitrogen oxide and sulfur dioxide emissions. The value of public health and climate benefits could reach $93 billion a year.
State officials are skeptical.
"The time frame allowed for this proposed regulation is extremely limited and will further exacerbate economic and logistic impacts of implementation," Herbert wrote in his comments. "The proposed changes to the energy portfolio warrant a time frame that allows for adequate planning, development and deployment of new energy options that insulate the system from reliability shocks and provide for an affordable power supply."
The state has already pared its reliance on coal, and Herbert is concerned about further reductions. Coal mining and power generation supports 2,737 jobs, mostly in rural areas, that pay twice the state average wage, according to Nelson's office.
"Any transition away from this historically low-cost electricity source will have economic repercussions not just for the communities of those employed in the industry," the governor wrote, "but throughout the state in the form of higher electricity prices."
Herbert's staff argues that coal is instrumental to supplying the grid's base load, which in turn enables development of alternative sources.
A question remains whether Utah will get credit for renewable-energy projects in the state that deliver their power to California, such as the 300-megawatt Milford wind farm. Pacenza argued California should get the credit since Milford turbines owe their existence to that state's policies and California ratepayers are footing the bill.
"Our focus should be how to reduce carbon output of the power we consume here in Utah," he said, "not what we export."