EPA rule on coal power plants is push toward clean energy and efficiency

WASHINGTON – The Obama administration issued landmark rules Monday to cut greenhouse gases from coal-burning power plants, mapping out a 15-year path to increase wind and solar power, and energy conservation that Minnesota already is taking.

The final Environmental Protection Agency rules require the U.S. power sector to cut carbon dioxide emissions by 32 percent in 2030 from 2005 levels. The overall reductions are stricter than those proposed in a draft last year, but states and utilities got more time to comply.

"This is one of those rare issues that if we don't get it right, we might not be able to reverse it," President Obama told a White House crowd that included Sen. Al Franken, D-Minn., and Xcel Energy CEO Ben Fowke.

The Clean Power Plan, Obama said, is "the single most important step America has ever taken in the fight against climate change."

Franken agreed. "I thought it was a bit of history," he told the Star Tribune.

The rules are the product of two years of EPA development and likely face years of legal challenges. States are required to develop compliance plans by September 2018, make interim reductions by 2022 — two years later than originally proposed — and fully comply by 2030.

States may choose to roll out an array of policies that could shutter coal power plants or run them less, order utilities to build wind farms and solar energy and invest in energy conservation at homes and businesses. The final rule puts less emphasis on converting or replacing generators with natural-gas burning units, which release about half the carbon dioxide of coal burners.

Compliance is not optional. States that refuse to offer acceptable programs will have a federal model applied to them, EPA officials said.

Minnesota, which has long mandated utilities make investments in efficiency and renewable energy, is better positioned than some states to comply with the Clean Power Plan. In the final version, the EPA recognized the state's early efforts at carbon reduction and reduced the 2030 carbon reduction target from 42 percent to 40.3 percent, said J. Drake Hamilton, science policy director for the St. Paul nonprofit Fresh Energy, which supported the plan.

"Minnesota will have a much smoother glidepath," Hamilton said.

Over the past five years, Minnesota utilities have decided to retire or convert 14 coal-fired generating units to natural gas. Minnesota gets more than 15 percent of its electricity from wind and has long required utilities to invest in energy efficiency programs. Even so, 55 percent of the state's power still comes from coal.

"We are probably more than halfway there already," David Thornton, assistant commissioner for air policy at the Minnesota Pollution Control Agency, said of the state's ability to comply with the Clean Power Plan.

Thornton said his agency will need several days to review the 1,560 pages of regulations, but he said the early indications are that EPA officials made the rules "a lot more equitable" among states.

Mike Bull, director of policy and communications for the nonprofit Center for Energy and Environment in Minneapolis, said energy efficiency is moving beyond lighting, heating and cooling systems. "Smart building services," which include technology to anticipate when buildings need extra cooling, for example, "will be where the largest reductions come in the future," he said.

Xcel Energy, the state's largest utility with 1.2 million electric customers, recently told state regulators it plans to add 600 megawatts, or three to four wind farms, by 2020. Yet Xcel wants to keep running until 2030, but at reduced levels, its two large 1970s-era coal generators at its Sherco power plant in Becker, the largest carbon emitter in the state.

In a statement, Fowke noted Xcel has been the nation's leading wind power utility for 11 years straight, part of a corporate policy to increase renewable energy and to modernize or retire coal power plants. "While we expect the Clean Power Plan does not provide everything we hoped for in terms of fully recognizing the early actions of proactive states and utilities, Xcel Energy is ready to move ahead," he said.

At Great River Energy, the state's second largest power company serving 650,000 Minnesota customers in 28 local cooperatives, officials are reviewing the rules' effect on North Dakota, where the cooperative power company owns three coal-burning power plants that are its main sources of electricity.

"It's time to regulate CO2 emissions from power plants — it is definitely time," said Eric Olsen, vice president and general counsel for Great River. "This rule may not be the best rule, but we've already been sitting down with Minnesota and North Dakota officials to talk."

In Washington, the national emissions standards have been a simmering source of controversy and business lobbying for well over a year.

The power industry and its allies said the rule will bring economic harm and cost jobs.

The National Rural Electric Cooperative Association, whose members rely heavily on coal-based electricity, said its study projected a 10 percent hike in the price of ­electricity with the loss of 1.2 million jobs by 2021.

Consumer Energy Alliance President David Holt, whose coalition represents dozens of trade groups and businesses, said "the White House failed to give significant consideration to the impacts to energy consumers."

Senate and House members from Minnesota split along party lines in reacting to the announcement.

Franken, a Democrat, called Minnesota's carbon-cutting requirements "very achievable."

In a statement, Democratic Sen. Amy Klobuchar said she was reviewing the new rules "to determine how they will apply in Minnesota, including the issues of credit for our state's early action and energy generation across state lines."

Democratic Rep. Tim Walz also promised to study the proposal to make sure it worked and wasn't burdensome.

Democratic Rep. Keith Ellison of Minneapolis, co-chair of the Congressional Progressive Caucus, said in a joint statement with Rep. Raúl M. Grijalva, D-Ariz., that the country needs to "undo harmful effects [of carbon] that have gone unchecked."

Democratic Rep. Betty McCollum likened the president's plan to what Minnesota has been doing for years.

But Republican Reps. John Kline and Tom Emmer see trouble in Obama's approach.

Kline said it "would cause energy bills to skyrocket for Minnesotans and all Americans who are feeling the effects of an already overburdened economy."

Emmer complained that the plan did not give Minnesota enough credit for earlier pollution control efforts.

"Not only is this plan patently unfair to Minnesotans, but it will have devastating impacts across the nation while providing little environmental benefit," he said.

david.shaffer@startribune.com • 612-673-7090 • @ShafferStrib