Arkansas Stakeholders Assess Effects Of EPA's Clean Air Rule

Aug 29, 2014

Stakeholders in the EPA's new rule on carbon emissions gather Thursday to discuss options at the headquarters Arkansas Department of Environmental Quality in North Little Rock.
Credit Chris Hickey / KUAR News

The Environmental Protection Agency’s draft of a rule to cut the nation’s power plant emissions by a rate of 30 percent by 2030 has the state’s utilities, business leaders and environmental groups at odds. Thursday, those stakeholders presented their differing views on how Arkansas fits into the national goal of lowering emissions.

Teresa Marks, director of the Arkansas Department of Environmental Quality, welcomed the various stakeholders for a meeting focusing on the economic impacts of the drafted rule.

“We realize people have different opinions about the rule, its legality, its substantive nature, its effect,” she said. “We understand all of that. The purpose of this group is to get together and look practically at what we think will work best in Arkansas.”

In June, the EPA announced separate targets for every state to reduce their power plants’ carbon emissions over a 15 year period. Arkansas has to reduce its carbon emissions by a rate of 44 percent, which happens to be one of the highest rate reduction targets for any state in the nation. Some, like Arkansas Chamber of Commerce President and CEO Randy Zook see this as a threatening scenario. The state’s low electricity rates are boon for industry, he said.

“This has enabled us to attract capital to fuel our economy in many of its sectors,” he said.

The rule, Zook said, will drive up costs, lower the standard of living, and cost jobs.

“This in our view is bad public policy driven by ideology, not science, and certainly not economics.”

Arkansas currently enjoys some of the cheapest electricity rates in the country, noted Dan Byers, energy policy analyst for the U.S. Chamber, who gave a presentation to the other stakeholders.

“Well what does that mean for the broader economy?” he asked. “It's huge for manufacturing, petro-chemical. All these energy intensive industries have decided to locate here for the very reason that Arkansas is one of the most affordable states in terms of electricity prices.”

Those cheap prices are thanks in part to a hefty supply of energy from the state’s 5 coal-fired power plants which produce about 43 percent of the state’s electricity. Around 26 percent of the state's energy comes from natural gas; around 24 percent comes from nuclear energy; while around 6 percent comes from renewable energy sources.

The EPA has proposed several "building blocks" through which states can cut back on emissions. Increasing efficiency at the coal plants  (according to a presentation by the Sierra Club, around 85 percent of carbon emissions in Arkansas come from coal-based power), shifting more energy production toward natural gas and renewables and reducing demand by increasing efficiency on the consumer’s end are all  building blocks outlined with the advent of the rule.

Nationwide, the EPA estimates consumers across the country will see a 6 to 7 percent rate increase in their electricity costs. Byers said those rates would likely go even higher in Arkansas. But the notion of economic harm was challenged Arkansas Sierra Club’s Glen Hooks.

“It seems like whenever there's a rule that regulates power plants, the Chamber [of Commerce] tends to be against it,” he said. “I can't recall a single time the Chamber has ever supported an Environmental Protection Agency rule that would regulate power plants.”

The predicted harm to industry is overblown, said Hooks.

“What I hear all the time is that the sky is going to fall, jobs are going to be lost, electricity prices are going to go through the roof and everytime there's a rule that happens [those scenarios don't] happen.”

Byers responded that the Chamber just wants to work things out with the EPA.

“What we want to see is a cooperative process. So I think it's not so much a binary question of support or oppose,” he said.

Byers cited the short timeline for comments on the rule, the long-shot achievability of the targets and the possibility of stranded assets through the premature closure of coal power plants.

Having to close coal plants is a scenario Duane Highley of the Electric Cooperatives of Arkansas, the state’s 2nd largest utility, said could easily happen. Though the state will have to meet a final carbon emissions reduction target of 44 percent in 2030, most of the reductions (41 percent) have to come by 2020. Highley says this could be trouble, given the years it takes to construct new plants to go along with a 4 year permitting process.

“[By] 2020, we can't make that compliance. We cannot give you a reliable power grid by 2020 if we close gigawatts of coal and we only have 4 years to get it done. We're asking in our comments, for more time which allows us to do that planning. That's so important. We get lower costs for our members if we can plan ahead,” he said.

Amidst the discussion of coal’s effect on the utility rates in Arkansas, the Arkansas Advanced Energy Foundation presented data showing the state could make serious economic gains through increased energy efficiency spending.

Dr. James Philips of the Arkansas Department of Health also explored coal's effects on public health. The release of Particulate Matter (also known as PM 2.5) from coal emissions can lead to asthma, thickening of the arteries, lung disease, heart problems, cancer and premature death, he said. High levels of Mercury released from the power plants can permanently alter a developing infant’s IQ.

“It's not reversible,” he said of mercury's neurologically damaging results. “What's the cost of that to our society?” he asked.

Phillips noted that the Health Department earlier this year found high levels of Mercury in the fish of 17 Arkansas lakes. A fish consumption advisory was issued for Lake Ouachita because of mercury in largemouth bass there. Phillips said about 46 percent of the mercury found in Arkansas’s lakes and streams comes from coal emissions.

A comment period on the EPA’s carbon emissions rule will continue until October 16th. Other meetings among the stakeholders are planned. The state still has to come up with a plan to meet the standards before the emissions rule goes into effect June 1st of next year.

More information on the drafted rule and the presentations from the Arkansas stakeholders can be found at the ADEQ's website.