A Major Win For Reliability & Affordability Of The Electric Grid

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Riddick
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A Major Win For Reliability & Affordability Of The Electric Grid

Post by Riddick » 06-30-2022 12:42 PM

Today the U.S. Supreme Court issued a landmark decision in West Virginia vs. EPA, ruling the Clean Air Act did not specifically authorize the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions from power plants. Now, any greenhouse gas regulations need specific authorization from Congress.

At issue was the Clean Power Plan (CPP), an EPA regulation promulgated by the Obama administration. The idea was states and electric companies could meet EPA established emissions targets by generation shifting, which effectively meant reducing use of coal-fired power plants or closing them down entirely and replacing them with a combination of wind, solar, and natural gas generation.

There were many problems with this regulation, some of them were legal, and some of them were practical.

The main legal problem with the CPP is that it relied upon a brand new and legally fraught interpretation of Section 111 of the Clean Air Act (CAA). This amounted to EPA inventing the authority to regulate greenhouse gasses under the CAA, but the Supreme Court ruled that these powers were never delegated to the agency.

This decision is a major win for reliability and affordability of the electric grid as it gives utility companies confidence they can continue operating their existing coal and natural gas power plants, which are some of the most reliable and lowest-cost sources of electricity on the grid, without the looming threat of EPA regulations coming down the pike to close them down.

The CPP marked a turning point for how investor-owned utilities and wind and solar special interest groups interacted. Once often at odds, the CPP turned them into brothers in arms. The reason all boils down to cold hard cash.

For example, in Minnesota, Xcel Energy’s corporate profits have soared as the state’s use of wind and solar has increased. Wind and solar groups lobby for coal plant closures and wind and solar construction, and Xcel rakes in the dough. Then, Xcel kicks some of the cash back to the green groups, feeding the vicicous cycle.

Now, utility companies in Minnesota and elsewhere will not be able to use pending EPA regulations as an excuse to prematurely close down reliable, affordable assets.

Today’s Supreme Court decision won’t fix all of our energy policy, but it is a positive step because decisions of this magnitude should be made by elected representatives in Congress, not by unelected bureaucrats in Washington D.C.

FULL STORY
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