MDN is pleased to add another occasional voice to Marcellus Drilling News. Stephen Heins is an energy and regulatory consultant for a Wall Street firm, and the former vice president of communication for Orion Energy Systems. Steve has penned an article (below) pointing out five critical problems with the recently announced EPA Clean Power Plan. Steve makes a strong case that the EPA needs to hold off on implementing this draconian new plan until the Supreme Court hears a case brought against the plan by 16 states. Pull up a chair and enjoy Steve’s expert insights…
By Stephen Heins
The Word Merchant, LLC
Now that the EPA has issued its final regulations for its Clean Power Plan (CPP), all of the interested parties, in and out of government, are spending hours and hours (and hours) reading through the 1,560-page document. While the final Clean Power Plan was meant to clarify how of the nation’s electrical grid will be governed, it has several problems besides its sheer length. Ultimately, the thorniest issue is the question of the Constitutional right of the EPA, or for that matter any federal agency, to impose federal mandates on the electrical grid where none existed before. That said, the fact that 16 states, a full third of the 48 states effected, have asked the EPA to voluntarily stay implementation of the final CPP regulations until the Constitutional litigation is over is profound.
In addition, there are several flaws in the details of the final EPA plan. First, the EPA has given no guidance as to what changes it has made to the CPP to derive its final form; second, the medical evidence supporting the indirect health benefits remains scanty; third, the choices of computational methodologies underpinning the whole plan are still very opaque and seemingly arbitrary; fourth, the final rules are very divisive as they pit many groups, states and regions against each other; and finally, because the legal justification for the Clean Power Plan remains unresolved, it has and will create a massive financial and jurisdictional uncertainty.
Certainly, it is understandable that many people and groups have been frustrated by the lack of a concrete national energy plan, which makes them more receptive to any federal entity finally attempting to bring order to the chaos of the “cooperative federalism,” which includes a large and diverse group of interests and responsibilities. The problem is that the electrical grid, as it is, has evolved into a remarkably complex organism including tens of trillions of dollars in assets and millions of often highly trained individuals each doing their job according to state and federal mandates, market forces, current regulation and economical development.
That said, one can’t help wondering why the EPA didn’t provide a primer that included all of the major changes it made from the June 2, 2014 proposal as compared to the finished plan of August 3, 2015, because as Brian Potts put it, “Virtually everything is different.” Highlighting the changes certainly would have added more transparency to a very complex new document.
In particular, the EPA should provide a more direct and detailed explanation of the indirect health benefits it continues to cite. In fact, it might be interesting for the EPA to provide statistical information on the number of asthma attacks, premature deaths and other related negative human effects, since June 2, 2014. Or, the EPA might document the indirect health harm done while waiting for implementation of the Clean Power Plan.
There is an old saying that “if one tortures the facts long enough, they will confess to anything.” In other words, why did the EPA change their various models, theories and numbers to derive its new plan? Are all of the computations comprised of cherry picking information or is there a deeper set of facts and information that infused the plan’s methodology?
Of all the problems embedded in the CPP, the most serious one is that it creates a divisiveness on almost every level. It pits commercial interests against each other, it pits states who benefit from the plan against states who are harmed; it pits utilities, large or small, against each other according to their fleet of electrical power sources; it pits renewable resources like wind and solar, and even non-emitting nuclear against each other for funding; it pits one region of the country against other regions of the country; it pits state utility commissions against each other; it pits industrial energy efficiency against residential energy efficiency; and finally, it pits states that have cap and trade emission schemes against those that don’t (and potentially creates a national cap and trade system without legislative mandate).
Then, there is the matter of uncertainty that the EPA’s Clean Power Plan has cast over the entire electrical grid financial market. To make matters worse, the investment money so necessary for funding and financing new electrical grid investments can not be made before the Supreme Court rules on the legality of the CPP. As has happened before, states and businesses will not be reimbursed for any money spent if the CPP is declared illegal.
There is so much at stake for the continuing economic development of the states, the regions and the entire United States. It seems like a modest request from Alabama, Arizona, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, South Carolina, South Dakota, Utah, West Virginia, Wisconsin and Wyoming to stay the implementation of the EPA’s Clean Power Plan until all of the legal issues are finally settled.
Certainly, the impressive progress made on greenhouse gas reductions in the 2005-2014 period and the “glide path” the electrical grid is already on without EPA mandates should count. In the interest of national unity, political fairness and economic development, the EPA should honor the modest request of the 16 affected States.
Currently, Stephen Heins is an energy and regulatory consultant for a Wall Street firm. Previously, Heins was Vice President of Corporate Communication for Orion Energy Systems, a publicly-traded leader in innovating energy and lighting systems based in Plymouth, Wis. He has published dozens of articles and op-ed pieces over the last 16 years on energy management, the utility industry, environmental issues, internet and broadband issues.