Climate Change

Gerald Gentleman Station, near Sutherland, Nebraska

Climate change is one of the most difficult and divisive issues facing customers, business leaders, utilities, fuel suppliers, regulators, elected officials, and society in general. And, since it’s a global issue, some ask whether any reduction in emissions of greenhouse gases by U.S. companies would affect how rapidly the world’s temperature rises or falls.

In such an uncertain environment, where so many stakeholders hold such strong and differing opinions, Nebraska utilities must consider the wisdom of investing up to hundreds of millions of dollars of your money to reduce carbon dioxide and other greenhouse gas emissions from our power plants.

It is in this context that NPA questions the wisdom of the U.S. Environmental Protection Agency’s early 2012 draft rule on carbon dioxide (CO2) emissions from coal- and oil-fired power plants. The agency’s draft Carbon Pollution Standard for New Power Plants effectively limits future power plant options to natural gas, nuclear or renewables. The CO2 emission standard proposed in the rule rules out new coal-fired power plants unless they are equipped with carbon capture and sequestration (CCS) technology, which is extremely expensive and not yet commercially proven.

NPA is concerned that limiting utilities’ choice of power-generation technologies will drive up electricity costs and customer’s monthly utility bills.

Around the world, utilities are testing experimental technologies to capture carbon dioxide emissions from power plants and permamently store them underground. Although initial demonstrations of carbon capture and sequestration (CCS) technology have been positive, the technology is still being tested. It is not yet ready for deployment at a large coal-fired power plant.

Stack at the Terry Bundy Generating Station, Lincoln, Nebraska

What those tests tell us is that CCS technology will be very expensive. Each power plant using CCS technology would have to spend several hundred million dollars—nearly the cost to build the original generator—to build and operate a CCS project.

If Nebraska’s utilities were to build a CCS project at their coal-fired power plants, the additional costs would lead to sharp increases in the price of your electricity. Monthly electric bills could go up by 25% or more.

NPA’s members have for years been working with their colleagues at other utilities, research organizations like the Electric Power Research Institute (EPRI), and climate scientists at universities and federal laboratories, to better understand the GHG issue and better estimate the costs that various ways to reduce power plant emissions of CO2 could impose on Nebraskans.

Because of the costs and uncertainties to reduce power plant CO2 emissions, Nebraska’s utilities are reluctant to take any action that would increase your electric prices and monthly electric bills. We continue to study this issue in a variety of forums, and we are staying current on the dynamic state of climate science, CCS technologies, and public policy.

Today’s extraordinary level of uncertainty about climate change is a poor setting for making sound business decisions about spending hundreds of millions of dollars on technological projects that may, or may not, work. The decisions we make on CO2 reductions will affect the price Nebraskans pay for electricity, their monthly electric bills, and even whether they have a job in the future. Rising electric bills could cause some businesses to close, resulting in job losses.

Moreover, we are not convinced that these large and expensive CO2 reduction projects will help the world lower the atmospheric concentrations of CO2, and thus avert potential ecological disaster. If American utilities spend billions of dollars to lower their CO2 emissions, but China and India continue to increase their CO2 emissions, our investments—and your money—will be wasted.

Nebraska's electric utilities have built a dozen wind farms since 2000 to meet customer demand for electricity in ways that minimize the impact on the environment

Nebraska’s publicly owned utilities exist solely to serve your electric needs. We are focused on providing you with low-cost, reliable, affordable electricity. We don’t think it’s wise to spend a lot of your money on technologies that have not yet been proven, and are not yet required by law.

The quality of Nebraska’s air, water, and land is very important to you and to us. One way we are working to reduce our impact on the environment is by investing heavily in wind power. Hundreds of megawatts of wind power have been built in Nebraska in recent years, and more is on the way. We have taken many steps—and will continue to take steps—to reduce emissions at our coal-fired power plants.

NPA member utilities play an active and constructive role in considering environmental regulations at the local, state, and federal level. Our goal, as always, is to strike the best balance between costs and benefits so that Nebraska’s publicly owned utilities can continue providing reliable and affordable electricity to all Nebraskans while acting in ways that protect the environment.