You can’t help but get frustrated
James P. “Pat” Howle, Executive Vice President and CEO
I am a fan of the University of South Carolina Gamecocks. I graduated from the University of South Carolina and both of my sons have carried on the family tradition. If you follow Gamecock sports, you know that umpires and their calls can sometimes be frustrating.
In many ways, umpire mistakes mirror what’s going on with government regulation regarding electric utilities and the production of electricity. The U.S. Environmental Protection Agency (EPA) writes the rulebook for power suppliers. EPA also serves as an umpire, enforcing the rules of the game. Just as I get upset when I see a bad call made on USC during a game, I’m upset when EPA folks make a bad call that puts pressure on your power costs.
New players in the game
For two years, Congress debated, but never passed, a comprehensive climate change bill. EPA stepped forward and has now fielded a team of new regulations. Out of these ‘players’, three could hit electric bills clean out of the park.
The first player, the Clean Air Transport Rule, kicks in next year and aims to cap power plant emissions of sulfur dioxide and nitrogen oxides from state to state between 31 eastern states and the District of Columbia. South Carolina is included. EPA claims the rule, when combined with other state and federal measures, will significantly reduce power plant emissions between now and 2014. The annual cost on compliance for that rule is $2.8 billion.
Next up are the cooling water intake requirements. Power plants use water from lakes or rivers to cool generating equipment. The protection of Fish and Wildlife are already factored into the design, but the EPA thinks more should be done. We expect to hear a proposed ruling sometime this month and the impact will likely be severe. The North American Electric Reliability Corporation, a bulk power grid watchdog, claims strict enforcement would require retiring a third of U.S. electricity capacity.
The third player is coal ash. To ensure safe disposal of fly ash and other residues produced by coal-fired power plants, EPA might designate them as hazardous waste. Compliance would cost billions and would put a stop to recycling efforts. A third of all fly ash is used as a Portland cement substitute, which reduces greenhouse gas emissions.
We’re asking for a time-out
Co-ops nationwide have asked Congress for a two-year moratorium on EPA regulation of carbon dioxide greenhouse gases. Lawmakers need time to fashion climate change legislation that protects you, our members. Electricity must remain affordable to the degree that it can, and additional burdens should not be put on the wallets of consumers. All of us at Horry Electric are working hard to hold down the cost of service. No matter what the future brings, one thing is certain: We’re looking out for you.