PJM said yesterday that the flexibility included in the Environmental Protection Agency’s proposed carbon emission rule is “an encouraging sign.”
PJM and other grid operators have called for a “reliability safety valve,” similar to that in the EPA’s Mercury and Air Toxics rule, which would allow the EPA to relax or delay implementing the standards in a region whose reliability would otherwise be threatened. (See related story, Carbon Rule Falls Unevenly on PJM States.) Grid operators also asked for regional compliance measurement so that states can take advantage of the efficiencies of integrated generation dispatch across multiple states.
Several PJM member companies weighed in with their own reactions yesterday, while their stock prices barely budged:
AEP
“It appears that for some states where we operate, the reduction requirements could be much more than 30% by 2030. Climate change is a global issue, and some states should not bear a disproportionate share of the cost of U.S. action to cut emissions.
“AEP is retiring more than one-fourth of our existing coal-fueled power plant fleet in the next few years. The plants that remain are the most efficient in our fleet and are equipped with more than $10 billion worth of emission controls that were installed to meet other EPA requirements. The investments that our customers made in these plants should not be prematurely lost when ultimately, it will have no impact on growing global greenhouse gas concentrations.”
AEP showed a modest gain, closing at $53.48, up 13 cents, or 0.24%
Calpine
“Calpine supports the EPA’s proposal because we believe it will ensure continued progress toward cleaner energy in a way that supports ongoing grid reliability while allowing market forces to work to deliver the lowest-cost solution for reducing GHG emissions,” said Thad Hill, Chief Executive Officer of Calpine.
Calpine, which has invested heavily in natural gas-fired generation, showed a modest gain, climbing up 15 cents to close at $23.47, up 0.64%.
Exelon
“We have just received the draft rule and are reviewing it and cannot provide any detailed comments at this point,” Exelon spokesman Paul Elsberg said. “However, we are pleased that the draft rule recognizes the critical importance of supporting the continued operation of the nation’s nuclear fleet. We look forward to working with EPA and key stakeholders during the coming months as the rule is finalized.”
Exelon closed at $36.60, down 23 cents, or 0.62%.
FirstEnergy
“Through investments in plant efficiency and multiple plant retirements, FirstEnergy expects a 25% reduction below 2005 levels in CO2 emissions by 2015,” company spokeswoman Stephanie Walton said. “This puts the company on target to meet the Obama Administration’s goal of a 30% percent reduction in greenhouse gas emissions by 2030, if credit is given for plants retired since 2005.
“Following our initial review, FirstEnergy believes it is in a strong position to meet the requirements outlined in the proposed rule, given our expected CO2 reductions in the coming years,” she said. “We are still reviewing how plant retirements will be counted towards the reduction target. As proposed, the rule uses an appropriate baseline year, provides states with reasonable flexibility, and gives an adequate compliance timeline.”
FirstEnergy closed down 27 cents, or 0.80%, closing at $33.55.
NRG Energy
“NRG views achieving significant GHG emission reductions — domestically and globally — as essential for creating sustainable businesses and a sustainable economy,” NRG said in a statement.
“Policies that focus on moderate, near-term emissions reductions, coupled with more aggressive out-year targets, will allow NRG and the rest of the power sector to continue to deploy a wide variety of clean energy solutions.
“Based on our initial reading of the EPA’s proposed GHG rule for existing power plants, we have concerns that EPA’s dramatically varying state emission targets may derail these objectives by adversely impacting electricity reliability and consumers in certain states and introducing excessive uncertainty and legal risk around the important objective of reducing GHG emissions.”
NRG Energy closed at $35.63, down a penny, or 0.03%.