State regulators to work with ‘stakeholders’ to meet EPA’s Clean Power rules

The Arkansas Department of Environmental Quality and the state Public Service Commission on Monday announced they would reconvene stakeholder meetings on Oct. 9 to begin the process of developing a state plan to meet the EPA’s requirement to reduce carbon emissions at 19 power plants across the state.

ADEQ Director Becky Keogh and PSC Chair Ted Thomas held a press conference on Monday (Aug. 24) at ADEQ headquarters in North Little Rock to outline the state’s response to what they called a “relaxed” emission standard for putting Arkansas on track to cut carbon pollution from the power sector 36% below 2005 levels by 2030.

“We are here today to reinforce our commitment to work with each other, other state agencies, as well as our commitment to work with ratepayers and stakeholders as we develop a roadmap and ultimately a state strategy for Arkansas,” Keogh said.

In early August, the federal Environmental Protection Agency on Monday released its final rules on President Obama’s far-reaching and controversial Clean Power Plan, which takes into account the more than 4.3 million comments received from states and stakeholders across the country following the first draft on June 2, 2014.

The EPA said the final rule sets “common sense” achievable state-by-state goals to cut carbon pollution from existing coal-fired power plants 32% below 2005 levels by 2030.
Under the plan, each state will have an emission-cutting goal assigned to it and must submit a proposal to the EPA on how it will meet the target. Under the earlier proposal, Arkansas would have been required to reduce carbon emissions by 44%, but the final rule change lowers the requirement to 36%.

Also according to the EPA, Arkansas, like all states, will have flexibility to meet EPA’s goal by using the energy sources that work best for it and by cutting energy waste. To date, all 50 states have demand-side energy efficiency programs; 37 have implemented renewable portfolio standards or goals; and 10 have adopted market-based greenhouse gas emissions programs.

Arkansas has set a goal to cut electricity consumption by 0.9% in 2015 compared to 2014. EPA’s rule builds on progress already underway in each state and provides guidelines for states to develop plans to meet their carbon pollution reduction goals.
Keogh said one of the key goals of the stakeholder process is to ensure that Arkansas’ “path forward does not create unnecessary or any artificial constraints that are inconsistent with the Clean Air Act.”

The ADEQ director said that the state plan will also address requirements of Act 382, which was passed by the Legislature during the recent 90th General Assembly. Under the legislation, any final plan that is submitted to the EPA must be reviewed through a “transparent public process” to assess the full impact of the federal rules on cost to Arkansas ratepayers, reliability, economic development, and greenhouse gas emissions.

Keogh and Thomas also said they recognize there are still some legal challenges to the EPA’s so-called 111(d) rule, but they are moving forward with crafting a state plan and do not want to delegate that authority to the federal government. Thomas also called the EPA’s final draft “less rigid” than its earlier proposal, mainly because regulators took a regional approach to bring Arkansas’ carbon emissions targets down.

“That didn’t help our neighbors, but it brought our requirements down,” he said.
The PSC chief also said the EPA listened to comments made by Arkansas stakeholders on new generation costs and changed some of the more onerous regulations to cut down on litigation risks.

“There are elements of this that we don’t like, but we stayed engaged throughout the process and we think that helped our state,” Thomas said.

As the state restarts the stakeholder process, the EPA has extended the deadline of single-state plans. By Sept. 6, 2014, Arkansas has the choice to either submit a final plan or an initial plan with a two-year extension request, regardless of whether Arkansas chooses to go it alone or join a multi-state plan.

States that chose to request an extension also must submit a process report by Sept. 6, 2017. Stakeholder input will be a key part of the plan, Thomas and Keogh said. If states fail to submit an approvable plan, then the EPA will step in and implement the proposed federal plan.

The EPA is now taking comments on the proposed 1,500-page federal plan, which will be filed in the Federal Register at a later date.

In response to today’s press conference, the Sierra Club of Arkansas released the following statement from Director Glen Hooks:

“The Sierra Club commends the ADEQ and PSC for moving forward on carbon reduction planning. While some national political figures are urging states to simply ignore the Clean Power Plan, Director Keogh and Chairman Thomas are showing responsible, nonpartisan leadership that is good for Arkansas. By working together with all stakeholders, Arkansas can take charge of writing its own plan that will dramatically improve our health, our environment, and our economy.

“While it is unfortunate that Arkansas Attorney General Leslie Rutledge is still pursuing what will ultimately be another failed legal challenge to the Clean Power Plan, Sierra Club looks forward to working closely with those who are committed to cleaning up our air and our energy supply. By working together, we can create thousands of new clean energy jobs here in our state, all while improving our air quality and protecting the health of Arkansans.”