State regulators voted Wednesday to challenge federal anti-pollution rules that they say will raise monthly electricity bills.
The Environmental Protection Agency on July 6 issued the Cross-State Air Pollution Rule, which is aimed at improving air quality by reducing the amount of nitric oxide created when utility plants make electricity.
The EPA estimates that the proposed rule that affects 27 states, including Louisiana, will cost about $800 million annually plus another $1.6 billion per year for new equipment. Utility company customers will have to pay those costs as part of their monthly bills.
“We’ve worked so hard to get our rates down,” said Jimmy Field, of Baton Rouge and chairman of the Louisiana Public Service Commission.
“Then all of a sudden, something out of our control, is handed down from Washington that affects not only our rates but our reliability,” Field said.
“It’s a tragedy that they’re fighting the clean air rules,” Casey DeMoss Roberts said about the PSC’s decision during an interview Wednesday. The executive director of the Alliance for Affordable Energy, a New Orleans-based group that advocates on behalf of Louisiana consumers, said that in addition to the health benefits, the rule would require utility companies to update old and inefficient equipment, which would make plants operate less expensively.
The EPA, in a news release, argued that the Cross-State Air Pollution Rule would improve air quality for 240 million Americans and prevent up to 34,000 premature deaths.
Basically, Louisiana’s utility companies would have to reduce nitric oxide — NOx — emissions by 10,000 tons before May, said David Dismukes, of Baton Rouge and the Acadian Consulting Group, which was hired by the PSC to study the impact of the new rule. That calculates to a 42 percent reduction of the amount of NOx emissions, the report stated.
NOx emissions can lead to ozone-related air quality problems that affect human health.
The only way to reduce those emissions would be for utility companies to either buy and install upgraded equipment, Dismukes said. But that could take three to five years, he said.
The alternative would be to buy “credits” from companies already in compliance, Dismukes said. But few companies in the South are in compliance, so few credits are available, he said.
Both options are very expensive and utility company customers would have to pay, Dismukes said.
If neither option is available, then the offending power generating plant would have to be shut down, meaning the electricity would have to be bought and transported to Louisiana or customers would face periodic power shut downs during the summer months, Dismukes said.
“They (customers) are going to be, literally, taxed by the federal government to satisfy a political motive. It is not a health issue,” said PSC Commissioner Eric Skrmetta, of Metairie.
The five elected members of the PSC voted unanimously to petition the EPA, asking to re-consider the particulars of the rules and file for legal relief with the U.S. Court of Appeals for the D.C. Circuit.
The PSC then met in private to discuss litigation strategy. The public was asked to leave the room where regulators were holding their monthly meeting.
The promulgation of the rule began under the administration of President George W. Bush. The regulations were appealed and by the time federal courts had ruled and returned the issue to the EPA, President Barack Obama had been inaugurated.
The two Entergy Corp. companies that provide power for about 1 million customers in Louisiana would be allocated 4,192 tons of NOx emissions, according to the PSC report. That is a drop of about 55 percent from 9,441-ton average over a three-year period.
Bill Mohl, the president and chief executive officer of Entergy’s two Louisiana subsidiaries, said in an interview, “We’re concerned about the timing of the rule and actual allocations.” Entergy would work closely with PSC lawyers on the issue, he said.