Why Colorado can meet standards of the Clean Power Plan
by Allen Best
Erin Overturf confided that she realized she was among an esoteric group at the outset of her remarks before the Colorado Renewable Energy Society on March 2.
“My husband would be absolutely startled that there are so many people who want to hear me talk about the Clean Power Plan,” she said.
Overturf is the senior staff attorney for Western Resource Advocates, who she described as “in-the-weeds, wonky folks.” Her duties including monitoring what Xcel Energy and other utilities propose to the Colorado Utilities Commission and, more broadly, the path forward to a decarbonized future.
While studying for a law degree from American University in Washington D.C., Overturf said, she went to the Supreme Court chambers to hear the arguments in a pivotal case called Massachusetts vs. EPA. In that case, Massachusetts argued that the EPA had a responsibility under the Clean Air Act to regulate emissions of greenhouse gases, including carbon dioxide. The Supreme Court, in 2007, agreed that the EPA had to show cause why it shouldn’t—or get along with the regulation.
The Clean Power Plan is that regulation. Issued in its final form last year, it’s a massive thing, running more than 1,400 pages, not including appendices, instructing states in how they can go about reducing greenhouse gas emissions from the electrical generating sector by 32 to 38 percent.
States have great flexibility in how they go about that. They can become more efficient in how they generate power from existing coal-fired sources, switch from coal to natural gas, or more directly switch to renewables. And, while not a formal building block identified in the plan, they can boost energy efficiency. Efficient use of electricity reduces the greenhouse gas intensity from the power sector.
“There are a gazillion ways that you can come into compliance with this rule,” said Overturf.
Colorado is in altogether good shape in meeting the Clean Power Plan goals, said Overturf. The plan has an interim goal of 2022 and then the final goal of 2030. Based on what Colorado already has done, it’s very close to meeting that 2022 goal. Given what utilities have already indicated they plan to do in the future, Colorado is about three-quarters of the way toward achieving the 2030 standard.
How did Colorado get to such a good position? Overturf pointed to Amendment 37, the first voter-initiated renewable energy standard in the country, adopted by Colorado in 2004. State legislators have elevated the requirements of investor-owned utilities and expanded the requirements to municipal utilities and electrical cooperatives. Colorado also has precedent-setting legislation governing community solar gardens.
A crucial move came in 2009, when legislators approved the Clean Air, Clean Jobs Act. That set the stage for replacing two of Colorado’s oldest and least-efficient coal-fired power stations, Valmont in Boulder and Cherokee north of downtown Denver, with gas-burning units. The one unit at Valmont has been replaced, as has one at Cherokee. The two additional units at Cherokee will be replaced by the end of 2017.
In addition, said Overturf, Colorado’s investor-owned utilities—Xcel Energy and Black Hills Electric—have indicated even more changes ahead in their most recent long-term resource plans filed with state regulators.
End of story? Not exactly. State officials have said that meeting the Clean Power Plan goals is not quite a slam-dunk. Just how Colorado will change its power production isn’t clear. Stakeholder meetings, described by Overturf as “a lot of very smart people looking at spreadsheets around tables,” have begun.
Of course, in places like Brush, Craig, and Pueblo, where coal-fired power plants continue to burn coal, there are giant questions about what the Clean Power Plan means for local employment and property tax assessments.
Nobody is saying that those plants are endangered, at least in the time frame of the Clean Power Plan. But changes are on the way—and just how the decisions will get made is not at all clear.
During the Q&A, I asked Overturf about the decision-making process at the state level. The PUC will be involved, along with the Colorado Department of Public Health and the Environment, and then the Legislature itself.
Overturf responded that state air regulations need to be the primary conduits for setting standards. She suggested a vehicle for then achieving changes. The Clean Power Plan identifies rate vs. mass-based approaches, and the mass-based approach will provide a platform for creating essentially a new marketplace.
We’ve had one such marketplace for 25 years, created when the Clean Air Act was amended in 1990 to address the effects of acid rain. Utilities were allowed to buy and sell emissions credits, based on their ability to respond. It’s called cap-and-trade. Congress in 2009 looked to use the cap-and-trade concept as a way to broadly deal with greenhouse gases, but the plan died in the Senate.
Overturf suggested that the mass-based approach can provide a platform for buying and selling emissions reductions not just in Colorado, but across the country—and that platform can be used as we move into other fronts to reduce greenhouse gas emissions. After all, the electrical power sector represents just 40 percent of U.S. greenhouse gas emissions. Buildings and transportation represent most of the rest.
But will the Clean Power Plan survive? Twenty-seven states have filed suit, seeking to block the Clean Power Plan. Included is Colorado, because of the action by Attorney General Cynthia Coffman, over the protests of Gov. John Hickenlooper. In response to those suits, the Supreme Court, in a 5-4 vote, agreed in February to stay implementation pending final judicial review. This stay of a regulation being implemented was without precedent, said Overturf, with giant implications. Whether the United States falters in its pledge to reduce greenhouse gas emissions has powerful international implications.
My second question – that I chose not to ask, to allow a more rapid retreat of CRES members to refreshments – was what Overturf considered to be the weakest link of the Clean Power Plan? In other words, are there provisions within the regulations that might more easily be challenged than others?
The stock answer I have heard from other environmental attorneys is that the Clean Power Plan is completely above reproach, meaning the only way it could be overturned is because of a political decision made by federal justices, not as a matter of law.
That may be correct, but I’m skeptical.