EPA's emissions plan is easier on Iowa
Iowa power plants would be required to cut carbon emissions 16 percent by 2030, a lower burden than the national average because of the state's investment in renewable energy development and energy efficiency, under a proposed rule from the U.S. Environmental Protection Agency.
"Iowa has already been doing its part," Liz Purchia, an EPA spokeswoman, said Monday. The federal agency is calling for existing U.S. power plants to reduce carbon emissions an average of 30 percent by 2030.
Still, critics and supporters have widely varying views of how the proposed federal rule will affect Iowa.
Critics say it will kill jobs, slow the economy and raise monthly utility bills. Supporters say it will help industries like farming that struggle with extreme weather, spark investment in green jobs and technology, and enable kids struggling with asthma to breathe easier.
EPA says fossil fuel-fired power plants — using coal and natural gas — are the largest source of U.S. carbon dioxide emissions. Overall, power plants contribute about a third of U.S. greenhouse emissions.
Alliant Energy said it's well-positioned to meet the requirements. "We knew these carbon regulations were coming, so we've been incorporating it into our generation plan. We're at a good starting point," said Scott Reigstad, a spokesman for Alliant Energy, an investor-owned utility based in Madison, Wis., serving 1.4 million customers in Iowa, Wisconsin and Minnesota.
Would it cost Iowa jobs?
Seven Midwest states, including Iowa, would see an annual average loss of $3.2 billion in economic activity and 27,400 fewer jobs through 2030 from the rule, according to a report from the U.S. Chamber of Commerce.
Mark Lucas, state director of Americans for Prosperity, a conservative political advocacy group, said the rules would be "particularly burdensome in Iowa," where about 62 percent of the energy comes from coal.
Opponents lining up against the rule Monday included Gov. Terry Branstad and U.S. Sen. Chuck Grassley. They said the proposal would mean fewer jobs in Iowa.
Branstad spokesman Jimmy Centers said the governor is concerned that EPA's "latest unilateral, ideological action" will "hurt Iowa consumers and cost Iowans jobs."
"First, the EPA attacked the Iowa farmer by slashing the Renewable Fuel Standard," a proposal that would reduce the amount of ethanol and biodiesel that must be blended in the nation's fuel supply, Centers said. "Now the EPA is set to mandate more government red tape that will lead to higher prices for Iowa consumers and make it more difficult to attract manufacturing jobs to our state" with higher energy costs.
Grassley was among the lawmakers and groups who successfully lobbied for longer review — 120 days from 60. "The EPA has an obligation to hear from everyone with an interest in this rule," he said. "The administration needs to understand the full impact of this regulation. Utility costs could go up for customers around the country."
Will it spark more investment?
Environmentalists say reduced carbon emissions attract high-tech companies concerned about reducing their carbon footprint and spark development of green energy technology.
Iowa could see 2,500 more jobs with a standard focused on increased energy efficiency, the Natural Resources Defense Council said.
The state leads the nation in the amount of energy it gets from wind, about 27 percent of its total portfolio, according to a wind industry group.
"Wind power helped attract Google, Facebook, IBM and Microsoft, in addition to the thousands of wind power jobs in our state," said state Sen. Rob Hogg, D-Cedar Rapids. "Energy efficiency is saving Iowa consumers billions of dollars in energy costs."
Environmental Entrepreneurs, a Washington, D.C., advocacy group, said Iowa added 1,600 clean energy and energy-efficiency jobs since 2012 and will "create thousands more" with the proposed rule.
"Iowa already is a national leader in clean energy," said Troy Van Beek, founder of Ideal Energy, a solar company based in Fairfield. "If we want to remain a national leader and keep creating good, clean energy jobs in our state, we need our state officials to implement a strong plan to implement these new EPA standards."
Alliant Energy and the Iowa Association of Electric Cooperatives said Iowa utilities have been investing in wind energy, converting coal plants to natural gas and retiring inefficient coal-fired plants.
Reigstad said Alliant Energy has invested $1.2 billion in wind generation and $1.4 billion in air-quality improvements and spends about $80 million annually on energy-efficiency programs.
MidAmerican Energy, based in Des Moines, is investing nearly $2 billion to add 1,050 megawatts of wind energy by the end of 2015. The company has said its energy from wind will climb to 40 percent — the single largest source of power — while coal-powered energy will drop to 33 percent.
The utility said it is still reviewing the proposed rule and declined to comment.
Utility bills: More or less?
Utilities said they can't predict the impact on consumer bills, while advocates predicted a small impact or even a cut.
Iowa residential consumers would pay $103 million less annually — about $76 per household — and businesses would pay $134 million less annually, the Natural Resources Defense Council said.
The electric cooperatives association said it's difficult to adopt regulations without consumers seeing a price increase.
"The proposed rules released by the EPA will likely lead to increases in our member-owners' monthly electric bills. The question is how much," said Marion Denger, the association president. Association members provide service to about 650,000 Iowans.
Among the electric cooperatives' main concerns: The costs to operate coal-fueled generation could be significantly increased. And the standard could potentially force "the premature shutdown" of some coal-fired electric-generating facilities.
Denger said the association supports "responsible environmental policies that balance the needs of the environment without significantly impacting power reliability or electric bills."
EPA expected the criticism. "Critics claim your energy bills will skyrocket. They're wrong," said Gina McCarthy, administrator of the U.S. Environmental Protection Commission, in announcing the landmark proposal Monday. She said any small, short-term change — "think about the price of a gallon of milk a month — is dwarfed by huge benefits."
"Climate change, fueled by carbon pollution, supercharges risks not just to our health, but to our communities, our economy and our way of life," McCarthy said, adding that families across the country are already coping with climate change that results in higher insurance premiums, property taxes and food prices.
What they're saying
The Natural Resources Defense Council
"Most Americans support curbing dangerous carbon pollution from power plants because it's the right thing to do. Cleaning up dirty power plants can be a bonanza for public health and a boon for energy efficiency jobs — and save Americans on their electric bills."
The group said limits on carbon pollution from power plants can save American households and business customers $37.4 billion on their electric bills in 2020 while creating more than 274,000 jobs.
Iowa could see 2,500 more jobs with increased energy efficiency, and residential consumers would pay $103 million less annually — about $76 per household — and businesses would pay $134 million less annually, according to a study by the group.
Iowa Interfaith Power & Light, in a letter signed by nearly 400 faith leaders, including 100 in Iowa.
"Carbon pollution is an environmental justice issue. Historically many power plants have been located near low-income neighborhoods, near communities of color, and in Midwest farm communities. These areas contribute much less to the problem yet are being hit the hardest in terms of health and climate impacts. Many of these citizens have pre-existing health conditions that make them more vulnerable to heat waves, reduced air quality and other consequences of burning fossil fuels. These communities also have fewer resources to adapt to climate change and therefore mitigation — reducing the causes of climate change — is critical."
Ceres, a national investor group managing $1 trillion in assets, with support from 128 businesses including Unilever and VF Corp., the apparel company whose brands include North Face
EPA's standard for existing power plants "represents a critical step in moving our country toward a clean energy economy. Our support is firmly grounded in economic reality. We know that tackling climate change is one of America's greatest economic opportunities of the 21st century.
"We are especially pleased to see an approach that catalyzes energy efficiency and renewable energy deployment. Clean energy policies are good for our environment, the economy, and companies. Increasingly, businesses rely on renewable energy and energy efficiency solutions to improve corporate performance and cut costs."
U.S. Chamber of Commerce
EPA's plans to regulate carbon dioxide emissions from power plants will cost America's economy $51 billion and lead to 224,000 fewer U.S. jobs on average every year through 2030, according to the group's study. "Americans deserve to have an accurate picture of the costs and benefits associated with the administration's plans to reduce carbon dioxide emissions through unprecedented and aggressive EPA regulations," said Karen Harbert, president and CEO of the Chamber's Energy Institute. "Our analysis shows that Americans will pay significantly more for electricity, see slower economic growth and fewer jobs, and have less disposable income, while a slight reduction in carbon emissions will be overwhelmed by global increases."
Climate change in Iowa
Iowa and the Midwest can expect increasing heat, floods and drought, according to a White House report released last month. The changes are affecting life now in urban and rural areas.
Rural areas
Climate disruptions to U.S. agricultural production — a $330 billion industry annually — have increased in the past 40 years and are projected to increase over the next 25 years.
Farmers can expect longer growing seasons and improved yields from some crops, but also extreme weather events and increased stress due to weeds, disease and insect pests.
Climate change effects on agriculture will have consequences for food security, both in the U.S. and globally, through changes in crop yields and food prices, the report said.
Urban areas
Residents in Iowa and Midwest cities could see greater climate issues. The report predicts "increased heat-wave intensity and frequency, increased humidity, degraded air quality and reduced water quality."
Cities' aging infrastructure is "particularly vulnerable to climate change-related flooding," the report said. Already, heavy downpours are contributing to "discharge of untreated sewage due to excess water in combined sewage-overflow systems."
U.S. greenhouse emission sources
32 percent electricity production
28 percent transportation
20 percent industry
10 percent commercial and residential
10 percent agriculture
Source: U.S. Environmental Protection Agency
What's next
The U.S. Environmental Protection Agency will collect comments for the next 120 days, holding four public hearings in Atlanta; Denver, Colo.; Pittsburgh; and Washington, D.C.
EPA won't finalize the proposed rule until June 2015. Then the Iowa Department of Natural Resources has one year and one month after that to work with stakeholders to develop the state plan.
Stakeholders would include the Iowa Utilities Board, utility leaders, the Iowa attorney general consumer advocate, environmental groups and members of the public, said Marnie Stein, a environmental specialist at the Iowa Department of Natural Resources.
Stein said those meetings would be open to the public. The Iowa Environmental Protection Agency will be required to approve a plan and DNR will enforce it.
Iowa's carbon emissions goal
Iowa is charged with reducing its carbon dioxide emissions 16 percent to 1,301 pounds per megawatt hours by 2030, under the proposal.
Iowa's energy mix
62.3 percent Coal
24.8 percent Wind
7.7 percent Nuclear
3.4 percent Natural gas
1.4 percent Hydro
Source: U.S. Environmental Protection Agency