The clean energy plan put forth by the Environmental Protection Agency aims to combat climate change by reducing the amount of carbon dioxide emitted by power plants. But it may come at a price, according to a report released Monday by the Electric Reliability Council of Texas, the group that manages much of Texas electric grid.
The report says electricity bills could rise as much as 20 percent because of the carbon reduction goals, adding that the goals could also endanger electric reliability. Part of that is due to the way the plan would change Texas' energy mix.
“What we found is that the likely impact of the clean power plan is going to be the retirement of a significant portion of the coal-fired capacity in ERCOT," says ERCOT Director of System Planning Warren Lasher.
The goal of the EPA’s clean energy plan is to reduce Texas carbon emissions by 30 percent by 2030.
Scientists say that reducing carbon emissions provides the best chance at averting potentially catastrophic climate change.
But the shift away from coal to less carbon-focused fuels would also require the development of new infrastructure to support solar, wind and natural gas plants. Lasher says that would mean less reliability of electric supply, and higher bills. He says bills could jump at much as 20 percent by 2020, if Texas adopts a carbon allowance system that taxes emissions.
"A lot of those increases are associated with the costs of carbon allowances in order to achieve the limits being imposed by the clean power plan," Lasher says.
But, Lasher says, it’s unclear if Texas lawmakers and regulators will opt for a carbon allowance system to comply with the EPA plan. In fact, a recent meeting of the Texas House Committee on Environmental Regulation left it unclear if Texas lawmakers will try to comply with the plan at all.
Some are questioning the assumptions ERCOT made in compiling the report.
For example, ERCOT projections for gains in energy efficiency in Texas are lower than the EPA’s projections. In the report, the ERCOT assumes a one to five percent decrease in electricity consumption due to energy efficiency programs. The EPA recommends that Texas seek closer to a 10 percent reduction.
Savings achieved by energy efficiency are important because they could impact the amount paid by Texas rate payers, and the amount of electricity used during peak hours when electric reliability becomes a challenge.
“So ERCOT basically took what EPA recommended as a possible path for the state and cut it in half." says Doug Lewin, executive director of the South-central Partnership for Energy Efficiency as a Resource, or SPEER. "With energy efficiency, the savings end up being greater than the cost because it reduces the entire cost to the system. So, to exclude that would not make a lot of sense and would artificially increase costs.”
Lasher says ERCOT found the efficiency goals in the clean energy plan to be "too aggressive."
"Unfortunately, that's not an area where ERCOT has specific expertise,” he says. “So that would certainly be something where we would need to confer with some of the transmission service providers who are responsible for some of those (efficiency) programs to see what the potential cost and viability would be.”