EPA releases New Source Performance Standards today for new power plants
Friday, September 20, 2013
Today,
all eyes across the energy industry are focused on the Environmental
Protection Agency as it releases the re-proposed regulations for
carbon dioxide emissions from future power plants, as part of the Clean Air
Act.
The
proposed carbon dioxide regulations are expected to significantly impact future
coal-fired generation across the industry because of its stringent limits.
The
agency first released its carbon dioxide emissions proposal in March 2012;
however, due to more than two million public comments, the agency went back to
reconsider its plan. President Obama requested the EPA re-propose the
regulations by Sept. 20.
On Wednesday, at a U.S. House of Representatives climate hearing, EPA
Administrator Gina McCarthy asserted coal will continue to be a significant part
of U.S. power generation, according to Politico and other media.
However, industry experts — including us — stress that coal-fired generating units cannot meet the expected limits thus
eliminating any new coal-fired plants without carbon-capture technologies and
underground storage. Those advancements are years away from being considered
commercially and economically viable options.
As regulated utilities, LG&E and KU are required to provide energy in a least-cost manner, while at the same time complying with environmental regulations. We plan to assess the regulations to better determine viable options and future changes to our generating fleet using commercially viable technologies.
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A new 640-megawatt natural gas combined-cycle plant under construction at our Cane Run Station (shown at left) is our only generating unit in the current fleet expected to fall under these
regulations.
Because
the carbon dioxide emission rate for the new plant at Cane Run is projected to be less than
the proposed regulations, the plant is expected to meet the new standard as
proposed.
In
the last four to five years, EPA regulations have significantly affected
coal-fired electric generation.
LG&E and KU are retiring approximately 800
megawatts of generation and investing more than $2.3 billion to make
environmental upgrades at the remaining facilities in order to comply with
regulations.
 |
| Coal has historically been the least-cost method to generate electricity. However, that is not always the case due to the stricter EPA regulations. Mill Creek Station (shown above), along with the company's Ghent, Brown Unit 3 and Trimble County Unit 1 generating stations, are being upgraded with modern technology to ensure we can continue to use coal to provide low cost and reliable electricity to Kentuckians. |
According
to Edison Electric Institute, in 2012, the U.S. power sector carbon dioxide
emissions were 15 percent below 2005 emission levels and were at the lowest
levels since 1996. This trend is expected to continue as companies, like ours, retire their older coal-fired generation and replace it with
cleaner, natural gas-fired generation.
The
President also directed the EPA to release proposed carbon dioxide emissions
regulations for existing power plants in June 2014.
We are closely monitoring these impending draft regulations that could have significant ramifications for our existing generation fleet.
