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Gannett Wash.: Co-ops say coal regulations threaten rural elec. customers

4:45 PM, Sep 21, 2012   |    comments
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By PAUL C. BARTON, Gannett Washington Bureau

WASHINGTON (Gannett) -- While coal comes under increasing attack as a power source, it has one of the nation's strongest lobbies coming to its defense rural electric cooperatives.

The Arkansas Electric Cooperative Corporation and the allied National Rural Electric Cooperative Association want a rewrite of the Clean Air Act that would guarantee a continued key role for coal in meeting electricity demand.

In so doing, they have common ground with the coal-mining industry and major investor-owned utilities that are heavily dependent on coal, such as the giant American Electric Power of Ohio. Entergy Corp., the major investor-owned utility in Arkansas, also has many coal-fired plants.

And rural electric cooperatives in Arkansas, which supply almost half a million customers, get 80 percent of their power from coal. For rural co-ops nationwide, the figure is 85 percent.

As a result, co-ops argue, coal-regulations could threaten their ability to meet long-term power needs, as well as raise prices.

As a result, they have taken umbrage with a series of major coal-related regulations emerging from the Environmental Protection Agency, especially over the past 18 months. Some in Congress, including House Speaker John Boehner, R-Ohio, have accused President Barack Obama of waging a "war on coal."

And earlier this year, the EPA issued proposed regulations to deal with carbon dioxide emissions, which it sees as a climate-changing greenhouse gas.

"The deadlines (for compliance) are so short and the regulations are stacking on top of each other," said Sandra Byrd, spokesman for AECC.

The AECC and the NRECA say they want a rewrite of the Clean Air Act that provides a more certain regulatory environment for utilities, especially those with coal-fired plants.

The EPA and federal courts, they contend, are having too much say over an area of law that Congress should control.

Last revised in 1990, the Clean Air Act remains one of the nation's landmark environmental laws.

"We believe it (the Clean Air Act) has been interpreted contrary to its original intent," Byrd said. "It's time for Congress to clarify it instead of the EPA legislating in lieu of Congress."

Arkansas Sen. Mark Pryor, a Democrat, has tried to help, writing the president and urging him to give utilities up to six years to comply with a new EPA regulation that calls on coal-fired plants to eliminate 90 percent of mercury emissions. He's also drafting a bill on the issue in cooperation with Sen. Lamar Alexander, R-Tenn.

But environmental groups remain wary of such talk.

"Rewrite is code for weakening the EPA's authority to limit pollution from some of these power plants," said David G. Hawkins, head of climate policy for the Natural Resources Defense Council.

Some environmentalists also fear a victory by Republican Mitt Romney in the Nov. 6 presidential election would supercharge efforts to revisit pollution laws.

On his campaign website, Romney calls for revising the Clean Air Act to make it more industry-friendly.

"A Romney win would make it a heck of a lot easier," Robert Walther, energy analyst at the moderate think tank Third Way, said of attempting a rewrite.

Meanwhile, defenders of the Clean Air Act have been counting on Obama backstopping them with his veto pen. Even if Romney wins, Senate Democrats would likely fight a rewrite attempt, Walther added.

Other environmentalists, such as Cathy Duvall of the Sierra Club, expect Romney would concentrate on administrative and regulatory actions to make environmental laws friendlier to coal.

"Clean air is like clean water. Both are immensely popular with the American public," Duvall said.

But with co-ops on their side through their national group, the NRECA, pro-coal forces are allied with one of Washington's most powerful grass roots lobbying groups â€" one that spreads millions in campaign contributions among members of Congress. The challenge is to find a lawmaker who doesn't get money from its political action committee.

"It (the NRECA) is as strong as horseradish," said Rep. Jim Cooper, D-Tenn.
In Arkansas, the AECC has co-ownership with Entergy Corp. of the Independence and White Bluff coal-fired power plants.

Despite many utilities nationwide switching to natural gas, coal remains the cheapest power source for the rural cooperatives, Byrd said. And that's not to mention, she said, that the United States has a 250-year supply.

Among the power plants owned by rural electric cooperatives nationwide, 85 percent are coal-fired.

"The reality is you are going to have to have coal," said Glenn English, head of the NRECA, said in an interview.

But some energy analysts say coal's real problem has more to do with the dynamics of energy markets than anything. Fracking, an exploration technique involving the use of water and chemicals to split rock formations deep underground, has resulted in an unprecedented abundance of natural gas, as well as record low prices for the energy source. As a result, many utilities have been switching from coal to gas-fired electricity.

"Most energy analysts expect that natural will remain cheap for the foreseeable future (20 years)," said Walther of Third Way.

English and Byrd acknowledge the growing importance of natural gas but say its continued low price cannot be assured.

"How long is it going to stay cheap?" Byrd asks. "It's the most volatile commodity on Earth."

Probably the biggest coal-related issue on the horizon for utilities is the EPA's proposed new regulations on carbon dioxide. A Supreme Court ruling in 2007 made it clear the EPA had the authority to regulate the substance, even though carbon dioxide is not mentioned in the Clean Air Act.

What especially worries coal-dependent power companies, Walther said, is a section of the act requiring the EPA to eventually consider applying new carbon dioxide rules to existing power plants, not just new ones.

Any attempt to reopen the Clean Air Act to make an exception for carbon dioxide, he said, would likely leave in place regulations on other coal-related contaminants like mercury and nitrous oxide.

"Those have a well-established record of human harm, and it is unlikely that Republicans would want to be seen (as allowing them)," Walther said.
Meanwhile, environmentalists like Hawkins lament the decision of the rural cooperatives to side with those seeking a rewrite of the act.

"We would like to see the rural electric cooperatives take a more progressive position," he said.

Contributions to Arkansas members of Congress for 2012 elections from the National Rural Electric Cooperative Association's political action committee:
- Republican Rep. Rick Crawford: $7,000.
- Republican Rep. Tim Griffin: $7,500.
- Democratic Rep. Mike Ross: $9,000.
- Republican Rep. Steve Womack: $7,500.
- Democratic Sen. Mark Pryor: $4,000.
Source: Center for Responsive Politics.

Contact Paul C. Barton at pbarton@gannett.com