Alaska utilities, leaders welcome exemption from emissions rule

Alaska utilities will not have to comply with new federal standards requiring cleaner power production.

The state is currently exempted from the Environmental Protection Agency’s Clean Power Plan, announced in its final form by President Barack Obama Aug. 3.

Proposed in June of last year, the ultimate goal of the 1,500-page Clean Power Plan is to reduce carbon emissions from power plants by 32 percent from 2005 levels by 2030.

Fossil fuel-fired plants emit roughly a third of the country’s total carbon pollution output, according to the EPA.

Alaska’s exemption from the requirements came as welcome news to electric utility leaders in the state.

“The federal government has acknowledged that the circumstances here are unique and the fact that there’s very little interconnection amongst the utilities,” Alaska Railbelt Cooperative Transmission and Electric Co. CEO David Gillespie said. “It’s a very different animal here (than the Lower 48) and I think the EPA has acknowledged that in this ruling and that’s a good thing.”

Sen. Lisa Murkowski also praised the EPA’s decision to omit Alaska, saying in a release that the final rule is a “victory” for the state, which has unique needs because of its limited ability to generate cost-effective and compliant energy, she said.

“Although I appreciate the EPA’s recognition of Alaska’s unique needs and challenges, I continue to have strong concerns about the national impacts of this rule. In the days ahead, I will be reviewing it closely to determine its impacts on electricity prices, the reliability of our electric grid, and many other related factors,” Murkowski said.

“While it is a positive for Alaska to be exempt, I am mindful of the fact that nearly every other state will be forced to comply, and of the burdens that will impose across the country.”

Murkowski chairs the Senate Energy and Natural Resources Committee and has moved an energy bill package of her own through the committee that is waiting to be heard on the Senate floor.

Gov. Bill Walker lauded the EPA’s decision on Alaska as well.

“Alaska has over 200 small utilities across the state, and a very limited power grid on the Railbelt,” Walker said in a release. “Alaska can and should be a leader in affordable, clean energy development. However, this has to be on Alaska’s terms given how unique our state is.”

Department of Environmental Conservation Air Quality Division Director Denise Koch said the exemption was unexpected.

A State of Alaska consortium of the Department of Law, Alaska Energy Authority, Regulatory Commission of Alaska and DEC combined to draft 70 pages of comments when the Clean Power Plan was proposed.

“We were preparing to have to comply with the rule,” Koch said. “We were hopeful of course that the EPA would have considered our comments, but it was not certain for sure that we would not be included in the rule.”

Along with Alaska, Hawaii, Vermont and the District of Columbia are exempt from Clean Power Plan requirements.

Hawaii has the highest residential electric costs in the country at 30 cents per kilowatt-hour, while neither Washington, D.C., nor Vermont have fossil fuel-fired power plants, according to the U.S. Energy Information Administration.

Supplied largely by Canadian hydropower, Vermont also has the lowest total carbon dioxide emissions of any state.

The Clean Power Plan is the first set of national standards to address carbon emissions from power plants.

“We limit the amount of toxic chemicals like mercury, sulfur and arsenic in our air and our water and we’re better off for it,” Obama said in a speech announcing the regulations. “But existing power plants can still dump unlimited amounts of harmful carbon pollution into the air. For the sake of our kids and the health and safety of all Americans that has to change.”

While the U.S. has cut carbon pollution more than any other nation over the past decade, this is the single largest step the country has taken in that regard, the president said.

“We’re the first generation to feel the impact of climate change and the last generation that can do anything about it. That’s why I committed the U.S. to leading the world on this challenge,” Obama said.

According to the EPA, 14 of the warmest 15 years on record have come in this century.

To reach their goals, other states will have to come up with plans as to how they will comply and submit those plans to the EPA.

Those plans will include steps to lower energy use from high carbon output plants through dispatch of power from cleaner and renewable sources and end-user energy efficiency measures.

Until 2030, the EPA will establish interim carbon performance rates for coal- and oil-fired plants separate from performance rates for existing natural gas-fired combined cycle generating plants.

States will able to measure carbon output as a rate — pounds of carbon per megawatt of power produced — or through total carbon output in short tons per year, according to the EPA

Alaska will not be asked to submit an efficiency plan, at least for now.

“The basis of that proposed rule was really based on the assumption that every location had this robust interconnected grid and we felt like some of the assumptions that the rule was based on were not appropriate and they were not accurate in Alaska,” Koch said.

The Clean Power Plan would likely have impacted five coal and natural gas power plants in the Railbelt, she said.

Developing a more reliable and efficient Railbelt transmission grid at a cost of more than $900 million has been a hot topic among region utilities and the Regulatory Commission of Alaska and even spilled over into the Legislature during the last session.

Koch encouraged tempered optimism about the announcement because of the reason for the exemption.

“It’s clear that Alaska isn’t included in this; we have no goals or deadlines for submitting plans,” Koch said.

“However, EPA talked about the reason for that is that they lacked appropriate information and they do go on to say that the EPA is going to seek additional pieces of information.”

The state group that drafted the comments plans to meet soon to discuss the meaning for Alaska, particularly if the EPA wants more information from them on what Alaska can do to lower its carbon emissions.

Elwood Brehmer is a reporter for the Alaska Journal of Commerce. He can be reached at elwood.brehmer@alaskajournal.com.


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