As President Obama prepares to unveil his climate change regulations on coal-fired power plants, the nation’s electric utilities are preparing to transform the system that keeps the lights on in America. But some companies fear that in the process, the lights may go out.
This summer, the Environmental Protection Agency is expected to release a final set of rules aimed at forcing electric power companies — the nation’s largest source of greenhouse gas emissions — to cut them 30 percent from 2005 levels by 2030. The Obama administration has consistently used 2005 as a baseline year for cutting greenhouse gas emissions.
The ambitious rules hope to remake the nation’s electricity system by closing hundreds of heavily polluting coal plants while rapidly expanding the use of natural gas plants, wind and solar power. Officials at electric utilities say that as they make that transition — taking the nation’s largest but dirtiest source of electricity offline and replacing it with a mix of cleaner power sources — they may face power failures.
“If the proposed rule stands the way it is, there will be blackouts,” said Nick Akins, the chief executive of American Electric Power, an electric utility that supplies power in 11 Midwestern states.
This week, the North American Electric Reliability Corporation, a utility industry group, issued a report concluding that, as written, the proposed climate change rules could pose “a significant reliability challenge” to the nation’s power supply.
The challenge facing utilities is steep: As they close coal plants that light millions of homes, they will need to quickly build new sources of electricity. Much of that will come from new power plants fueled by natural gas, which produces half the carbon pollution of coal. But they will also build vast new wind and solar farms. Turbines built on windswept plains and solar panels built in sunny deserts will need new power lines to connect them to the grid, but siting, permitting and building such lines can take up to a decade. In some parts of the country, electric utilities may choose to build new nuclear plants. Nuclear power produces no carbon pollution, but creates many controversies about storing nuclear waste. Companies also plan to invest in energy-efficient technology to help move and store the new power on the grid.
In the long run, Mr. Akins and officials from other electric utilities say that they do expect to meet the requirements of the regulation by 2030. The hard part, they say, will be maintaining reliable power during the transition. In particular, they note that the E.P.A.’s draft proposal requires states to start demonstrating significant emissions cuts as early as 2020.
“This is going to be a major transition of the electricity system. All these things can be done, but not in that time range,” said Gerry Cauley, president of the North American Electric Reliability Corporation.
States and coal companies are already challenging the rules in federal court, and if they are successful, the Obama regulations, as written, could fall apart. But that would not remove the legal requirement for the E.P.A. to regulate greenhouse gases, even under a future president.
Across the country, the burden will be unequally spread, with states that depend most heavily on coal-fired power facing the biggest lift. Today, coal-fired power accounts for about 40 percent of the nation’s electricity over all, but for some states, coal supplies much of the power, while others use very little. In Kentucky, for example, 92 percent of electricity comes from coal. Coal powers 83 percent of Missouri’s needs and 67 percent of Ohio’s. But the West Coast states, which rely heavily on hydroelectric power and other low-carbon sources, get less than 10 percent of their power from coal.
In California, which has already enacted an ambitious state-level cap-and-trade law to reduce carbon pollution, on top of another state law requiring generation of renewable electricity, utilities anticipate that meeting the federal regulation will simply be a continuation of business as usual.
“California is already on track to achieve the reductions in the rule,” said Melissa Lavinson, vice president for federal affairs at Pacific Gas and Electric. “The way we’re moving forward under the California law, we’ve reduced emissions, increased renewables, and we haven’t had a problem with reliability.”
E.P.A. officials say they are aware of the concerns about reliability, particularly in the coal-dependent Midwest.