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September 2011 – An electric power generation company in Texas, said it would close two coal plants and lay off 500 workers to comply with a future rule regarding pollution of air. The rule is being promulgated by the Environmental Protection Agency.
Luminant, who generates more power in Texas than any other company, filed a suit against the U.S. Court of Appeals for the District of Columbia to exempt the state from EPA’s New Cross State regulation of air pollution to reduce oxides of carbon dioxide and sulfur dioxide. Luminant said it must reduce to 9% of its production in order to comply. The rule was finalized in July, and many utilities with coal plants, including Luminant, said the timing is too narrow for them to make changes needed to complete renovation of old facilities to meet reduction targets.
Some groups consider the announcement of the suit by Luminant as proof that environmental regulations are killing jobs. The House of Representatives plans to introduce a series of laws that will soon bar EPA’s regulatory authority, including the rule of cross-state contamination.
The Committee on Energy and Commerce, said: “The new rule establishes an excessive burden for the states of Texas and beyond, and others who have to bear a disproportionate share of emissions in the country.”
The EPA issued the new rule, after the release of the federal courts rules that the administration of George W. Bush had in place. In a statement, the EPA said it had worked with Luminant to meet the standards without layoffs and plant closures.
Officials of the State of Texas and utilities argued that the new EPA rules could lead to plant closures and the erosion of the power distribution reliability that are essential for the state with an epic drought to continue next year. But environmentalists said the energy sector has known since 1990 to limit carbon emissions, and some have begun to build cleaner plants, without layoffs or reduced reliability of the electricity grid.
Reduced generation capacity generally converts to higher electricity rates for everyone. We have had a brutal summer in 2011 with respect to electricity supply and demand. Losing as much as 10 percent generation capacity would certainly mean rolling blackouts if we have a repeat of this summer in 2012. Even though the Energy Information Administration isn’t predicting any large increases in electricity rates for 2012, they don’t consider the effect this rule may have either.
We’ll be watching this develop.