Indiana Governor Mike Pence joined 14 other governors in signing a letter asking President Barack Obama to reconsider the Clean Power Plan submitted for approval by the Environmental Protection Agency (EPA).
The letter was signed and submitted to the president the same day Tom Easterly, Commissioner for the Indiana Department of Environmental Management, testified before the House Committee on Energy and Commerce’s Subcommittee on Energy and Power.
Pence and Easterly claim the plan, which strives to reduce carbon dioxide emissions by roughly 30 percent nationwide by 2030, will be detrimental to Hoosiers.
"We knew these rules were bad when the EPA first released them, and they keep getting worse the more we learn,” said Governor Pence. "The proposal is ill-conceived, poorly constructed, and will cause significant harm in the states. We should be focused on an energy policy that pursues affordable and reliable energy, rather than a climate agenda that will drive up electricity prices without any discernible impact on global carbon dioxide emissions.”
However, local environment groups, like the Hoosier Environmental Council (HEC), don’t think the Pence administration is giving the plan a chance.
“It’s irresponsible,” says HEC Executive Director Jesse Kharbanda. “The better and wiser course of action would be to think about how to further refine the rule rather than eliminate it.”
Easterly’s testimony supports Pence’s position. The IDEM commissioner told the House subcommittee he believes the proposed regulations will increase greenhouse gas emissions by forcing businesses to search for other areas to do business that have less efficient and more carbon intensive energy supplies. He also claimed consumer rates would increase affecting the poor, elderly, and the most vulnerable. He concluded his testimony with questions about the reliability of other fuel sources and faulty infrastructure as plants convert from coal to natural gas.
“This is truly ironic and deeply troubling,” says Kharbanda. “I think that the piece about Commissioner Easterly’s comments that’s most troubling is characterizing this as being economically harmful. There has been no state-specific economic analysis on the impact of this policy on Indiana. Because it is flexible, it’s plausible that energy bills will go down under this plan.”
The Clean Power Plan calls for the reduction of emissions by percentages that vary from state to state as determined by the EPA. The plan also allows each state to come up with its own plan for how those benchmarks are reached whether it’s through plant retirements, renewable energy standards, transmission efficiency improvements, switching to natural gas, increasing use of renewables like wind and solar, or a long list of other choices. The plan is currently in the comment stage, which is scheduled to conclude next month. If the plan moves forward as scheduled, it could be approved by Summer 2015. Once finalized, states have two to three years to submit their compliance proposals and 15 years to implement them.
Indiana would have to reduce carbon dioxide emissions by 20 percent by the year 2030 using 2012 emissions numbers as the starting point. Kharbanda says a Wall Street Journal analysis determined Indiana’s requirements to be the weakest of all 50 states.
“And when the EPA did its own analysis of how different states would probably comply with the policy, they concluded that the main compliance mechanism that Indiana utilities would use would be energy efficiency investments,” says Kharbanda.
Indiana’s reliance on coal is a major reason why the Pence administration believes the Clean Power Plan is bad for Indiana. Coal firing produces 80 percent of Indiana’s electricity. Pence says the state has a 300-year supply of the fossil fuel. The coal industry in the state employs 28,000 people. But Kharbanda believes that is one of the reasons why the EPA determined energy efficiency to be the primary solution for the state to meet the new standard.
“It’s also because of the EPA’s analysis of what our total energy efficiency potential is in the state which continues to be significant because we have old building stock in our major metropolitan areas,” says Kharbanda. “So it’s really a combination of the fact that we’re very coal heavy and because we have a lot of buildings primed for getting energy efficiency upgrades.”
To Easterly’s point in his testimony to the House subcommittee regarding potential brownouts and questionable infrastructure, Kharbanda says utility companies are more than prepared to comply.
“The utilities are making decisions in a very comprehensive and rigorous way by way of their integrated resource plans. And these are 20-year plans that they re-examine every two years,” says Kharbanda. “Those plans very much take into account existing as well as anticipated regulations and thinking about those things from the perspective of cost as well as from the perspective of reliability. So, to characterize this as putting these unexpected heavy burdens on the utility sector is not accurate. Utilities have long anticipated that they would be subject to some kind of greenhouse gas controls and they’ve accounted for that in their decision-making.”
The Pence administration believes the plan creates unconsidered consequences and implications, however Hoosiers are still waiting for the governor’s updated energy efficiency plan after he trashed the plan that was in place.
“If the administration was so sincere about cutting energy bills facing Hoosiers, which is completely understandable in our economic times, you don’t become the first governor in the country to eliminate a successful Republican-established energy efficiency program,” says Kharbanda.
In the letter to the president, the governors’ state that the country “needs a coherent, consistent energy policy that promotes reliable and affordable energy in addition to a healthy environment.” Kharbanda says the country has one with the Clean Power Plan.
“In the absence of Congressional action on climate change, we think that the EPA Clean Power Plan is a sensible realistic way of cutting greenhouse gas emissions from the country’s largest source of those emissions.”