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EPA proposes killing Clean Power Plan, but market already cutting carbon

St. Louis Post Dispatch

Wednesday, October 11, 2017  |  Article  |   By Jacob Barker

Coal (20) , Energy, Alternative Energy (93) , Utilities (94)
The country’s first rules designed to reduce power plant carbon emissions blamed for climate change appear to be on their way out, but that doesn’t mean much will change.

Market forces continue to push down the cost of renewable energy and keep natural gas competitive with coal, the most carbon-intensive fuel used by power plants. And there’s still almost no interest among utilities to invest in new plants as old ones retire.

But the Obama-era rules would surely have forced earlier retirements of coal power plants and kept coal from making a resurgence. Known as the Clean Power Plan, the rules have been closely watched in the St. Louis region in part because Ameren Missouri operates one of the most coal-intensive power fleets in the country and several of the world’s largest coal mining companies are headquartered here.

St. Louis-based Peabody and Creve Coeur-based Arch Coal joined lawsuits challenging the rules. And Ameren, a politically powerful force in state politics, urged former Missouri Attorney General Chris Koster to join other states suing to block the rules. Koster, then running for governor, soon became one of the only Democratic attorneys general to join the legal challenge.

Yet even before the rules were implemented, Peabody and Arch were both forced to restructure their finances in bankruptcy court, a result of debt and competition from a deluge of cheap natural gas. They’ve clawed back this year mostly due to higher natural gas prices and global demand for coal.

And after President Donald Trump was elected and signaled he would repeal the carbon regulations, Ameren opted to make the biggest renewable energy announcement in its history. Just two weeks ago, the utility said it planned to spend $1 billion on some 700 megawatts of new wind power by 2020. That’s about three-quarters of the capacity at its Sioux coal plant in St. Charles County.

“My hope is Missouri will actually hit the Clean Power Plan targets anyway,” said Ashok Gupta, an energy economist with the Natural Resources Defense Council based in Kansas City. “For Ameren, the markets were penalizing them for being not diverse.”

On Wednesday, Environmental Protection Agency Administrator Scott Pruitt issued a proposed rule to begin repealing the regulations, a process that will certainly draw legal challenges from environmental groups.

Peabody, the world’s largest private-sector coal company, applauded the rule’s repeal.

“We encourage continued steps to protect affordable, reliable and resilient coal-fueled generation for American families and businesses, and support repeal of regulations that would have raised power costs and damaged reliability with no significant benefit,” the company said in a statement.

Ameren did not comment on the rule’s repeal, instead issuing a statement reiterating the outlines of its long-term power generation plan.

When the Clean Power Plan was first proposed, Ameren argued its own schedule would reach the carbon dioxide reductions in the regulations — just five years later than the 2030 deadline. Ameren said then that the rules would end up costing more for customers by forcing it to retire coal plants and invest in new generation more quickly than necessary.

Utilities like Ameren, which plan investments decades into the future, know that the policy can change again under a new administration. And Pruitt’s proposed rule doesn’t say whether the agency will draft a replacement to the Clean Power Plan.

Whether it does could become critical in the ensuing legal fight because the Supreme Court has already said the EPA can regulate greenhouse gases under the Clean Air Act and the EPA has declared greenhouse gas dangerous.