EPA’s Clean Power Plan can work for Arkansas

Editor’s note: Steve Patterson is executive director of the Arkansas Advanced Energy Association and is owner of CDP Strategies, LLC, a political and event management consulting company based in Little Rock.

Opinions, commentary and other essays posted in this space are wholly the view of the author(s). They may not represent the opinion of the owners of Talk Business & Politics.

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Arkansas has nothing to fear from the Environmental Protection Agency’s Clean Power Plan (CPP). Arkansas power companies, policymakers and advanced energy companies already have the state on a path toward compliance that will have minimal impact on electricity rates – and could even save money.

The CPP will simply accelerate technology and market trends that are already moving Arkansas toward an electricity system that is more reliable, clean, affordable and responsive to customer demands. Compliance with the Clean Power Plan is not only attainable for Arkansas, it can stimulate economic growth.

In part, that’s because some things have changed. When the first draft of the CPP was released in June 2014, Arkansas was targeted for one of the highest carbon reduction requirements in the country. However, after hearing from Arkansas stakeholders, EPA moved Arkansas to the middle of the pack. That will make it easier to comply.

At the same time, the state’s two largest public utilities are developing plans to add more than 3,000 megawatts (MW) of renewable energy and natural gas and help customers save energy. Cleaner energy sources and lower energy consumption both reduce the state’s reliance on imported fossil fuels and put Arkansas on the way to meeting EPA’s emission requirements.

DIVERSE SOURCES OF ENERGY
For Arkansas, the CPP means that, over time, more of our energy will flow from diverse local sources like:

• Natural gas from the Fayetteville shale and gas fields in South Arkansas;
• Large-scale solar from nearly 100 MW of solar energy now under construction and more than 1,000 MW planned by Entergy Arkansas, SWEPCO and the Electric Cooperatives of Arkansas;
• Wind generated in the Oklahoma panhandle and delivered to Arkansas by advanced energy transmission technology manufactured here at home; and
• Energy efficiency, which lowers energy costs for Arkansas ratepayers and expands a thriving home-grown industry.

Already, advanced energy technologies like renewable energy and energy efficiency support 25,000 jobs in Arkansas as part of an industry valued at $2.7 billion, according to a 2014 study commissioned by the Arkansas Advanced Energy Foundation. Study author and local economist Jim Metzger, of Histecon Associates, says with the AE sector growing at about 11% annually, its impact on the overall state economy in 2020 is projected to be about $4.8 billion in direct sales and indirect activity supporting the industry.

VEHICLE FOR MODERNIZING ELECTRICITY SECTOR
What this means for electric rates can be seen by using the new State Tool for Electricity Emissions Reduction (STEER), an open-access modeling tool developed by the Advanced Energy Economy Institute and customized for Arkansas at the request of the Arkansas Advanced Energy Association (AAEA).

Under several different scenarios run through STEER, Arkansas is able to reach compliance with the Clean Power Plan in 2030 with a minimal increase – one-third of a cent per kilowatt-hour or less – compared with a business-as-usual projection of electricity prices for that year. It could even result in a small savings. And no existing coal plant would have to close beyond those already announced for retirement.

What will happen to the CPP in the courts, nobody knows. But AAEA rejects the argument that reducing carbon emissions is beyond Arkansas’ ability or will cost too much money.

When EPA came out with its final Clean Power Plan, Gov. Asa Hutchinson said: “When it comes to Arkansas’ energy policy, we must take a balanced approach in consideration of safety, reliability, cost-effectiveness and environmental impact.” We wholeheartedly agree.

By utilizing existing advanced energy technologies and services that are available in Arkansas today, the state’s plan to meet carbon reduction targets can be the vehicle for modernizing our electricity sector; introducing competition, choice and innovation for new products and services; and triggering significant job growth in a vital new industry. This is a future we all want and expect for Arkansas.