New Environmental Rules May Raise Electricity Costs

The cost of electricity would increase substantially and service reliability could be significantly affected under proposed federal environmental rules, the staff of the Virginia State Corporation Commission said in comments filed this week with the U.S. Environmental Protection Agency this week.

Federal officials are calling for cutting carbon emissions from existing power plants 30 percent below 2005 levels by 2030 in an effort to fight climate change, improve public health and provide affordable energy.

Those rules would lead to a rise in electricity prices because they would much of today's electricity production be replaced with costly generation and expensive programs to decrease energy use, the SCC staff said.

The EPA predicts that Virginia utilities will have to shut down fossil-fuel power plants reliably producing 2,851 megawatts of electricity, and replace that generation with just 351 megawatts of wind power.

"This raises alarming regional reliability concerns," the staff said.

But the SCC staff said it takes no position on the broad policy questions involving carbon emission reductions on a national level and said its comments should not be construed as representing the views of the SCC's commissioners, who may have to decide on utility plans to comply with the federal rules.

The Richmond Times-Dispatch reports that the staff said it made an "indicative cost analysis" of the incremental cost for Dominion Virginia Power to achieve the EPA's carbon reduction goals. For example, complying with the rules would likely cost Dominion Virginia Power customers alone an extra $5.5 billion to $6 billion, the staff said. Richmond-based Dominion is the state's largest electric utility.

However, environmental groups questioned the SCC staff's analysis, saying Virginia is already 80 percent of the way to meeting the state's carbon pollution target under the Clean Power Plan.

"The SCC staff analysis is just plain wrong," said Glen Besa, director of the Sierra Club's Virginia Chapter. "They're playing politics with climate change science and they have no business doing that, and they're bringing discredit on the commission."

Cale Jaffe, director of the Southern Environmental Law Center's Virginia office, said almost all of those reductions are coming from coal plant retirements and natural gas conversions that the utilities put in place long before the Clean Power Plan was released.

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