TEN T

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BOUT
THE

13th

Eric Groten
Texas Public Policy Foundation
Annual Policy Orientation for the Texas
Legislature
January 8, 2015

1. NRDC Wrote the Rule.

M
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A
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PL A
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C OP Y

2.

Its energy policy, not

environmental policy.

y
g
r
e
n
E

y
c
n
e
Ag

y
c
i
l
o
P

Q: Who said?
The great thing about this [Clean Power
Rule] proposal is that it really is an
investment opportunity. This is not about
pollution control. Its about increased
efficiency at our plants, no matter where
you want to invest. Its about investments
in renewables and clean energy. Its about
investments in peoples ability to lower
their electricity bills by getting good, clean,
efficient appliances, homes, rental units.

A: The person who signed the Clean

Power Rule:

EPA Administrator Gina McCarthy

(July 23, 2014, testimony before
the Senate Environment and
Public Works Committee.)

3. Its centrally planned energy

policy, to boot!

Practice safe
government.
Use kingdoms
.

EPA dictates its optimal mix for each State

from four Building Blocks:
1. Improve the
average heat
rate of coalfired plants by
6%

2. Displace coal
plants by
increasing
generation from
existing NGCC to
70% utilization

3. Delayed nuclear
plant retirements
and increase
renewable portfolio
standards

4. Increasing state
demand-side energy
efficiency efforts to
reach 1.5% annual
electricity savings in
the 20202029
period

Texas: From 1292 lb CO2/MWh in 2012 to 791 lb CO2/MWh in 2030

Block

Decrease in Intensity
(lb/MWh)

Contribution to
Reduction in Overall
State-wide Intensity

1. Heat rate
improvements

49

4%

2. Gas-favored
dispatch

258

20% (by increasing

CCGT utilization to
70% from 45%

3. Increase renewables

124

10% (assuming 20%

RPS)

4. Demand side
management

70

5% (by annual 1.5%

increments over 10
years

TOTAL

501

39%

EPA Re-slices Texas

Electricity Pie

The blocks come tumbling

down

o al
c
f
i
s
1. A perators
to
plan arent
d
n
a
d
vate ugh
i
t
o
m
eno
t
r
a
sm
n
to ru tly
en
effici

2.
Ten
PA ss
E
.
4
NG per
g ro
s
t
CC cen
s
eca icity
run pl
r
t
o
o
f
cap at ant f
ectr d to
l
e
s
7
a
era city 0%
n
a
m
e
o f $ in
SE
d
A
E
t
R
h
3
DEC 2020 to
gas /MC e
F
from 030!
3. Assumptions
2
based on
regional
averages of RPS,
not individual
state capabilities
or political
judgments

Generation Made Simple

4. Texas Gets Hit Hardest

Just b
ecaus
e y ou
doesn
re pa
t me a
ranoid
n they
re no
t afte
y ou .
r

5. Its illegal on many levels, and will

not be sustained.

Question
Authority

Choose your favorite fatal

flaw
Section 112 displacement
States as stationary sources
ESPS stricter than NSPS, covering different
sources
Dont use it is the BSER
Lack of EPA authority to do what it asks of
the states
Etc., etc., etc.

Section 111(d) is thin ice on which to skate a

national energy policy
Title IV Acid Rain Program
shows how Congress directs
national regulation of power
plant emissions to achieve
regional objectives:
Source-specific down to each
power plant
SO2 only, for a stated
Congressional purpose
Comprehensive in detail
Budgets based on
achievability of limits using
available controls

25000

Clean Air Act Word Count

23725

20000

15000

10000

5000

301

0
Title IV

111(d)

Supreme Court Skepticism

When an agency claims to
discover in a long-extant
statute an unheralded power
to regulate a significant
portion of the American
economy, we typically
greet its announcement with
a measure of skepticism. We
expect Congress to speak
clearly if it wishes to assign
to an agency decisions of vast
economic and political
significance.

6. Prohibiting usage is deemed the

best system of emission reduction.

My Other Car is a
Bicycle

7. EPA Demands What it Cannot

Deliver.

NOT
H ING
IS IM
TO T
DOE HE PER POSSI
B LE
S N T
SON
HAV
W HO
E TO
DO I
T.

8. EPA cant sanction states

for refusing to play.

9. EPA Doesnt Explain How Our Climate

Will Differ.

10. Best State policy?

1. NRDC wrote it
2. Its EPA acting as the Energy Policy Agency
3. Its bad energy policy
4. That hits Texas especially hard
5. Its illegal and eventually will be overturned
6. Its precedent for EPA controlling production
7. States asked to do that which EPA cannot
8. If states refuse, EPA cant sanction
9. It has zero effect on climate
10. So whats the best policy response?

If youre not appalled,

you havent been paying
attention.