Recently, the Texas legislature devoted two days of hearings to the EPA’s Clean Power Plan, which was proposed last June. This rule aims to reduce the emissions of carbon dioxide from existing power plants by 30 percent. Although opinions widely vary in the testimony, one thing was clear: the EPA’s plan assigns to Texas a regulatory burden far greater than any other state. Our state’s carbon sin appears to be the creation of the most productive industrial economy in the U.S.
The EPA’s Clean Power Plan would impose a low-carbon mandate on Texas almost twice as heavy as the next two states — Florida and Louisiana — combined. Texas generates approximately 11 percent of the country’s electricity, but under the EPA’s plan, would be obligated to achieve over 18 percent of the national goal. Texas, indeed, consumes more electricity than any other state, but the EPA would demand that Texas reduce CO2 by more than twice its commensurate share.
Unlike other states, industry and manufacturing consume over half of all electricity generated in Texas. Although many still think of the upper-Midwest as the industrial hub of our nation, Texas is now the largest industrial state, if upstream oil and gas production is included in the tally. Is it fair to punish Texas for high consumption of electricity when consumers across this country and the world enjoy the benefits of Texas products fundamental to commerce and household comfort?
Texas is not — as it has frequently been labeled — the nation’s worst CO2 polluter. The volume of CO2 emitted from Texas power plants is substantially higher than other states because our large, hot state and productive energy industries demand large volumes of electricity. When the rate — rather than the volume — of CO2 emissions is considered, Texas plants have a lower CO2 emission rate than 32 other states.
The coal fleet in Texas is the youngest, most energy efficient, and most environmentally sound. Average emissions of nitrogen oxides — key precursors to ozone formation — are almost 50 percent less than the national average. Over the last 20 years, coal generators in Texas have invested billions to retrofit plants with elaborate technologies to achieve dramatic reduction of genuine pollutants like sulfur dioxide, particulate matter, mercury, and nitrogen oxides. Much of this investment would be lost if the EPA’s Clean Power Plan is adopted.
The EPA’s modeling, on which the rule was designed, projects that Texas would have to scuttle over half of current coal generating capacity. The EPA itself acknowledges these “retirements” would mean the closure of at least 19 Texas power plants, and a loss of 16,565 Megawatts of generation, which is 15 percent of the state’s total 110,000 MW of generating capacity. It is difficult to imagine that the rapid loss of over 16,000 MW of base load power would not risk reliability.
But the biggest surprise for Texas in the Clean Power Plan is the EPA’s conclusion that Texas can increase renewable generation by 150 percent above the current 12,000 MW of installed wind capacity. Texas now hasmore wind resources than any other state, and if considered a nation, Texas has the fifth largest renewable capacity in the world. The EPA’s justification for this huge expansion of renewable generation is murky. Apparently, the EPA believes that the wide open spaces and many sunny days in Texas are reasons enough.
The EPA’s Clean Power Plan poses grave questions for the Texas legislature and state agencies. The federal rule obligates state governments to comply through state implementations plans similar to the plans that Texas develops for ozone. The federal mandates in the EPA’s power plan rule, however, exceed the authority of TCEQ under existing state law. The Public Utility Commission of Texas is actually the agency whose function is most directly implicated. The PUCT, however, also lacks authority to carry out the EPA’s ambitious scheme.
Changing state law to accommodate the EPA’s proposed plan would mean ceding to the federal government longstanding state oversight of electric utilities guaranteed in federal law since 1935. Loss of the competitive electric market and the fuel diversity of the current Texas generating mix would be unavoidable under the proposed rule.
If the rule goes forward in its current form, legal challenges are certain. However, judicial challenges take years to move through the courts, and in the meantime, Texas would face regulatory-induced chaos. Only the U.S. Congress can restrain the EPA by establishing clear limits to this agency’s burgeoning regulatory reach.
Kathleen Hartnett White is a distinguished senior fellow-in-residence and director of the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation.