Proposed EPA rules to limit carbon dioxide emissions

For decades, there has been attempts to limit carbon dioxide emissions at local, state, national and international levels. Since the intent is to reduce climate disruption that known no borders, getting agreement to take action has been challenging, to the say the least. The argument from those opposed to such reductions is that it will cost the economy by raising the price of energy. This might be true if one ignores the external costs of using fossil fuels (the primary source of CO2 in this case) and the cost of adapting to the wide range of effects to our world from climate disruption. Carbon credits have been used in Europe and elsewhere, while a carbon tax has been resisted successfully. The idea that we need to reduced our CO2 emissions isn't new and any responsible group or individual that is in the policy side of power plant production should be aware of this. Earlier this week, the U.S. Environmental Protection Agency issued a set of regulations that is up for comment. The regulations are intended to bring down the level of CO2 emissions from power plants overall and to do so on a statewide, not on just a per-power-plant basis. The proposed rules have already generated a lot of politicizing, which is unfortunate though predictable. I mean, does one really think that the intent of the EPA and Obama Administration is to 'destroy the economy'? The cost of mitigating CO2 is not well known because the concept of sequestering it is still pretty experimental. The cheapest way to reduce CO2 emissions is to not generate them. This is why the EPA proposed guidelines has a goal of reducing the carbon pollution emitted for each megawatt-hour of electricity generated and not necessarily eliminate coal fired power plants that can't reduce the CO2 output. GVEA is one of the few power companies in Alaska using coal for generation. With a 25 mw older coal plant in operation, GVEA recently committed nearly $200 mm to purchase, refurbish and install selective catalytic reduction (of nitrous oxide) equipment for Healy 2, a 1990's era experimental power plant. The loans GVEA is using are for 30 years, meaning that we owner-members will be paying debt in excess of the face value of the loan for that long. Coal plants typically cost twice as much as a natural gas fired power plant to construct, while the coal as a source of fuel is currently cheaper. This is what drives GVEA to use coal, because they can defer paying the piper and hope that they can not have to address cost of mitigating CO2. I have argued that is a false hope and believe it is irresponsible. GVEA seems to love new projects and in the 5 years since we members allowed the board to not be restricted in borrowing, GVEA has roughly doubled the amount they have committed to borrowing than the previous limit of $450 million book value. I find that scary for members who will be paying off these loans for decades in their utility charge. The utility charge is roughly half of your bill with energy charge from the cost of producing the energy the other half. However, with the demonstrated need to reduce our CO2 emissions worldwide, for the life of me, I don't see the need to take on more long term debt that we can't get out of. There is a surplus of natural gas fired electricity in Southcentral now. Matanuska Electric has overbuilt generation, Munipal Light and Power (Anchorage) has surplus, Homer now has their own generation. Chugach, which formerly sold power to these utilities, now has surplus to sell as a result. GVEA had considered an option to build a natural gas fired power plant in Southcentral, but then would want more tie line capacity to Healy. These discussions were in executive session, so we don't know all the considerations. We are limited to 78 mw across the 138kv Intertie from Southcentral that terminates in Healy. We have roughly double that between Healy and Fairbanks. The Intertie can be upgraded relatively easily as the towers and insulators and some equipment is already designed for double that voltage. The point here is that a more efficient transmission network could allow us to take advantage of cleaner power throughout the Railbelt. The Alaska Energy Authority has a Railbelt Transmisson Plan that details where constraints and improvement might help us further the goal of cleaner and more efficient energy. Caveat: it's a detailed study and the costs aren't insignificant. Instead of a knee-jerk objection to the EPA, we might instead work toward our long term best interest of economic and cleanly generated electricity.