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Indiana environmentalists cheer new EPA emissions standards

August 3, 2015

Indiana environmental groups are applauding President Barack Obama's newly announced mandatory cuts in greenhouse gas emissions.

The cuts were announced Monday and are even more stringent than expected. They call for a 32-percent reduction in power plant carbon dioxide emissions by 2030.

The Sierra Club's Jodi Perras heralded the president's announcement as "historic" and said Indiana power plants are among the biggest power plant polluters in the nation.

Republican Gov. Mike Pence reiterated opposition to the new rules, which will be administered by the Environmental Protection Agency.

Pence said he will refuse to submit an emissions-reduction plan to the EPA, as called for under the new regulations.

“When it comes to energy policy, this administration continues to place its environmental agenda ahead of the interests of Hoosier ratepayers, jobs and the economy," Pence said in a written statement released Monday afternoon. "Here in Indiana, homeowners and businesses rely on coal-burning power plants for low-cost, reliable energy. Yet little to no consideration was given to states like ours throughout the development of the EPA’s final rule and that is simply not acceptable.

“If the final rule is not significantly improved, then Hoosiers can be assured that on behalf of families, businesses and other ratepayers, Indiana will not comply."

Proposal changes

Obama's proposal from last year set the target as a 30-percent nationwide cut by 2030, compared to the levels in 2005. His revamped plan calls for a 32-percent cut in the same time period.

Left unchanged is Obama's overall goal for U.S. emissions cuts from all sources of pollution, including cars and trucks. As the U.S. commitment to a major global climate treaty that Obama is championing, the U.S. committed to cutting its emissions in the range of 26 percent to 28 percent by 2030, compared to 2005.

Time to comply

Many of the complaints directed at Obama's plan over the last year centered on the amount of time states would have to figure out how to meet their targets. Plans for how states will comply are technically due next year, but there's no penalty to asking for a two-year extension, so most states are expected to delay. Under the earlier plan, the rock-bottom deadline was 2017, but that's being pushed back to 2018.

And while states previously had until 2020 to achieve their targets, they'll now have an extra two years — until 2022.

Renewable energy

Obama's revised plan relies more heavily on renewable energy sources like wind and solar replacing dirtier coal-fired power plants. Obama now wants the U.S. to get 28 percent of its power from renewables by 2030, compared to 22 percent in his earlier proposal.

In a new element, the administration now intends to offer pollution credits to states that drive up renewable energy generation in 2020 and 2021 ahead of the compliance deadline. States that invest early in wind and solar can store away those credits to offset pollution emitted after the compliance period starts in 2022.

The earlier version of Obama's plan sought to accelerate the ongoing shift from coal-fired power to natural gas, which emits far less carbon dioxide. But the final rule aims to keep the share of natural gas in the nation's power mix the same as it is now.

EPA Administrator Gina McCarthy said government estimates show renewable energy has ticked upward even since the rule was proposed last year, but that natural gas remained an important part of the U.S. energy mix.

Energy efficiency

Under the revamped plan, state energy efficiency efforts are no longer factored into the individualized reduction targets being assigned to each state. In other words, what states are already doing to reduce energy demand won't be included in their baseline the way that other measures, like replacing coal plants with cleaner sources, will be. That means some states could face more stringent targets despite their efforts in the past to cut down on electricity use.

But states will still be able to get credit for energy efficiency programs when it comes to meeting their targets in 2022. The revised power plant rule also offers polluting credits to states that deploy energy efficiency programs in poorer communities.

Power bills

Although the administration predicts the plan will actually lower the average U.S. energy bill by almost $85 in 2030, companies that produce and distribute electricity aren't buying it. The savings come largely from increased use of wind, power and hydro plants, which operate at a cost of close to zero after they're installed but cost a lot to get up and running. The administration is also counting on people's power bills going because they'll simply use less power as a result of efficiency measures.

The National Association of Manufacturers, the American Coalition for Clean Coal Electricity, the National Mining Association, the American Energy Alliance and the National Rural Electric Cooperative Association all predicted the rule would drive electricity bills up. But the Georgia Tech School of Public Policy and the research firm Synapse Energy Economics have published analyses of the proposed rule that back up Obama's claim that power bills will go down.

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