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COMMENTARY ARCHVES
   

APRIL COMMENTARY
by Share Brandt

Question of the Day

Here comes another one! This one could spell doom for the use of coal-fired generation. Yes, I am speaking of yet another new rule in its final stages of consideration by the Environmental Protection Agency. This rule is the New Source Performance Standards (NSPS), which would regulate greenhouse gas (GHG) emissions from power plants.

Two hundred twenty-one Democrat and Republican members of the U.S. House of Representatives signed a letter urging the Administration to reconsider. Their stated reason is that the GHG standards for new and modified coal-fired power plants could only be achieved through the use of costly technologies such as Carbon Capture and Sequestration (CCS). Affordable, reliable electricity is critical to keeping and growing jobs in the United States and such a standard will likely drive up energy prices and threaten domestic jobs.

Pancaking Rules

Earlier this year we reported on two other regulations slated for implementation this year. The Cross State Air Pollution Rule (CSAPR) took effect on January 1, 2012, only to be stayed by the US Court of Appeals for District of Columbia Circuit. Arguments in the court-ordered stay are expected in April. While this gives utilities more time to comply, the regulatory uncertainty lingers, making long-term power-supply decisions difficult for utility managers. Adding the equipment to comply will cost over $100 million for each upgraded power plant. Then it will cost millions of dollars annually to operate and maintain pollution control technology to control sulfur dioxide (SO2), nitric oxide (NOx), and particulate matter.

The other rule is the Mercury and Air Toxics Standards (MATS), also known as the Maximum Achievable Control Technology (MACT) rule. Reportedly the EPA estimates the annual benefits from the mercury rule at $6 million annually. The cost of compliance is estimated to be $9 billion annually.

On top of these regulations, the determination on regulating coal ash as a hazardous or non-hazardous waste still lingers. Dairyland Power Cooperative recycles nearly 100 percent of the coal ash residue. The waste product is incorporated into Portland cement for roads and bridges or drywall for building construction. If the EPA designates coal ash as hazardous waste, recycling will no longer be an option. It would require more hazardous waste landfill space. The courts may soon resolve the issue as environmental groups have announced their intention to file a lawsuit to force a hazardous designation.

Hard Choices

To upgrade low-cost coal generation or not is the utility manager’s question of the day. As more and more new regulations are announced or new lawsuits settled by the courts forcing the EPA to take action, the answer appears to be mothballing the old workhorse and converting to other sources of generation. Natural gas is currently the preferred and lowest-cost choice. However, it depends on the natural-gas extraction technology being deemed safe and reliable for the environment.

Whatever the answers are, one thing is clear: Electric consumers will pay the cost in their monthly bills. The best answer for you is energy efficiency and conservation measures for your whole house. The professionals at your electric co-op can help; give them a call.

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