By Tom Kleckner
LITTLE ROCK, Ark. — MISO’s 15 states may be able to comply with the Clean Power Plan through 2025 by redispatching the RTO’s generation fleet, according to early modeling by RTO staff.
David Boyd, vice president of government and regulatory affairs, told officials of Arkansas’ Department of Environmental Quality and Public Service Commission on Jan. 5 that MISO has been conducting modeling exercises in three “discrete tranches.” The first analysis, due to be completed in February, was conducted to help the RTO understand how it might help its footprint reach compliance.
“It looks like we can be compliant as a region through 2025, primarily through dispatching energy,” Boyd said in discussing the preliminary results. “We believe we can use the new resources coming online and existing resources to reach compliance.”
Boyd told the joint stakeholder meeting that the study is based on a “viable trading scheme” within its region. He said MISO is also conducting individual state-by-state analyses and an evaluation of leakage’s effect on generation dispatch.
“As we look forward with state [renewable] standards, bringing more wind resources online, state energy efficiency programs … we’ll be all right,” Boyd said.
Boyd said more information is forthcoming at the Jan. 20 Planning Advisory Committee meeting. MISO staff told the PAC in December that a flexible compliance strategy that mixes generation resources and trading programs will lower compliance costs. (See MISO: Coal Retirements, Gas Prices, Flexibility Key to CPP Compliance Costs.)
Boyd told the group that changing MISO’s dispatch processes by incorporating carbon costs could “lead to an increase in the cost structure of electricity.”
The ADEQ and APSC — which are jointly developing the state’s response to the CPP — have been gathering comments and feedback. The state’s comments on the CPP are due to EPA by Jan. 21. Arkansas and other states face a Sept. 6 deadline to submit either an implementation plan or an extension request to EPA; states that don’t meet the deadline run the risk of having a federal implementation plan imposed.
ADEQ Director Becky Keogh reminded the group that Gov. Asa Hutchinson has directed them to find the least-cost compliance method. At the same time, Arkansas’ attorney general has joined the multistate litigation against the plan.
“Arkansas is continuing to pursue a dual-strategy approach that involves communications with other state agencies, the attorney general’s office and the governor’s office,” said Stuart Spencer, the ADEQ’s associate director of air quality. “While we still plan to enter comments, we’re mindful our attorney general has entered litigation.”
The stakeholders were joined by Sarah Adair, a senior policy associate with Duke University’s Nicholas Institute for Environmental Policy Solutions, who has been crisscrossing the country convening regional dialogues on the CPP. She described the pros and cons of the mass- and rate-based compliance approaches.
Several stakeholders noted the absence of a reliability safety valve in the federal implementation plan. “My understanding of how EPA would approach reliability would be to work with FERC on the federal plan” in the same way states are required to demonstrate they considered reliability in developing a state plan, Adair said.
“The EPA says in the final rule [it’s] not worried about reliability with a trading system,” she said. “With the allowances or credits, companies can always go out and buy more credits if they need to run a unit more.”
The flexibility of trading, which does not limit emissions from any particular unit, “inherently addresses the issue of reliability,” Adair said in an interview.
