The Situation
In a state that relies on coal as the fuel source for 94 percent of its electricity, Indiana is facing a challenge to balance an increasing demand for affordable electricity with environmentally-responsible generating practices. For several years, the United States Congress has been considering legislation designed to reduce greenhouse gas emissions associated with global warming. Thus far, these proposals have all failed to be put into law, due in part to the voice of the public through groups such as the Indiana Partnership for Fair and Affordable Energy (PFAE). While PFAE supports environmentally-responsible generating practices to address climate change concerns, our goal is to work with Hoosiers and our Congressional delegation to ensure that any Federal legislation or regulatory activity will not burden rate payers with significant cost increases. An appropriate legislative framework along with a focus on new technology and energy conservation can mitigate the burden of rising costs. With your help, we can do our part to reduce our impact on the environment and make sure the cost of implementing new energy technology will not financially impact consumers all at once.
Click here to read the most recent legislative update from the Partnership.
While Congress was debating the issue, the Environmental Protection Agency (EPA) began leveraging its authority to regulate carbon dioxide and other greenhouse emissions from power plants and commercial facilities under the federal Clean Air Act - despite vows from Republicans in Congress to stop or slow such rules. President Barack Obama has pledged that the United States will cut emissions 17 percent from 2005 levels by 2020 and Congressional inaction enables the EPA to take equally aggressive action through the Clean Air Act. The EPA began paving the way in 2009 when it declared carbon dioxide as one of six greenhouse gases that endanger public health and welfare. This action set the stage for EPA to begin regulating carbon emissions from all sources including vehicles, power plants and most industries. Without Congressional action to stop or delay the EPA, those regulations ramp up significantly in 2011.
The EPA regulations actually began January 2, 2011 with a “tailoring” rule for greenhouse gas emissions aimed at large scale emitters such as power plants, refineries, and industrial plants. This new rule sets permitting requirements based on the greenhouse gas emissions levels for new construction projects and current facilities undergoing significant modifications. These permitting requirements will affect various facilities - becoming an operational and financial challenge that many companies will face for the first time ever. The bottom line is that any decision made by Congress or change regulated by the EPA will have a significant impact on your electric bill. You can get involved in the dialogue by contacting your Indiana Congressional Delegation with your concerns at www.fairpowernow.org.
The EPA’s series of new environmental regulations threaten electric reliability as well. Recent studies by the North American Electric Reliability Council (NERC) and others suggest that up to 20 percent of the U.S. coal generation capacity is at risk for premature retirement. These estimates are based on the economic impact of compliance with rules to control cooling water intake structures, hazardous air pollutants, ozone and fine particulate matter, and coal ash. The projections don’t include EPA regulations to control greenhouse gas emissions. Already, the electric industry has announced plans to retire over 30,000 MW of coal plants in the coming decade.
