Ohio regulators tell lawmakers not to interfere on carbon rule

©2015 E&E Publishing, LLC
Republished with permission

By Rod Kuckro

Despite Ohio’s antipathy toward U.S. EPA’s proposed Clean Power plan, under no circumstances do state regulators want the General Assembly to pass any law that would interfere with eventual compliance.

“We do not think that the plan is legal, and we have mounted a legal challenge,” said Asim Haque, vice chairman of the Public Utilities Commission of Ohio. “This is in fact an energy policy.”

The PUCO, Ohio Environmental Protection Agency, Gov. John Kasich and Attorney General Mike DeWine “are all on the same page,” he said.

“However, we want to be as constructive in shaping the final rule as possible,” he said in an interview yesterday in Washington, D.C.

“In the event the Clean Power Plan survives legal challenge, we want to ensure that the concerns of the state of Ohio are relayed to EPA and are potentially represented in the final rule,” Haque said.

He and Ohio EPA Director Craig Butler recently testified before a special joint committee established to weigh the costs and benefits of the state’s renewable energy and energy efficiency mandates.

They were asked by lawmakers whether they should be thinking about legislative action on the Clean Power Plan or efforts to control carbon emissions.

Haque said Butler, whose agency would have to craft a compliance plan, replied, “No. Because we’re not exactly sure how this final rule is going to shake out, and we do not want you Legislature to essentially do something that would tie our hands associated with the legal challenge or potential compliance.”

The General Assembly last year passed a bill placing a two-year freeze on the state’s renewable energy and energy efficiency standards. It also established the Energy Mandates Study Committee made up of legislators from both chambers. The committee has a deadline of Sept. 30 to recommend legislation to ease the mandates.

Under EPA’s proposal, Ohio would have to reduce its power-sector carbon emissions rate 27.7 percent between 2012 and 2030 — less than the majority of states. Ohio’s power plants produce the fourth most emissions per year, according to EPA data on sources affected by the rule.

Efforts to cut back on renewables and efficiency could complicate regulators’ efforts to comply with the EPA rule, as both are pathways suggested for compliance by the agency (EnergyWire, June 3, 2014).

The PUCO and Ohio EPA “have been working together since the rule was released” conducting analyses, Haque said. Among those analyses is modeling that “put a price on carbon at a regional level,” across the entire footprint of the PJM Interconnection, the regional grid operator.

“Our numbers were quite staggering,” Haque said, finding that in 2025, compliance with the EPA rule “would elicit a 39 percent increase in wholesale energy prices.”

Ohio used the same program as PJM to model compliance, and Haque said the state’s results fell into the “spectrum of possibilities” that PJM itself came up with in its own models. “Ours is on the very expensive end of the spectrum,” he said.

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