Power Plant Emissions
NPA members operate their generating stations in compliance with all federal, state, and local environmental regulations. Complying with those regulations can be expensive: advanced pollution-control equipment can account for up to 30% of the cost to build a new power plant. In 2010, NPA member utilities spent tens of millions of dollars complying with environmental regulations. We expect those costs to rise—perhaps quite sharply—over the next five years. And we expect the costs of complying with environmental regulation will be reflected in future electricity prices and your monthly bills.
Clean Air Act
The environmental regulation of power plants—particularly by federal actions—is changing in significant ways, all of which are likely to increase the price of your electricity and the size of your monthly bill. In a series of new regulations that will be released over the next five years, the U.S. Environmental Protection Agency (EPA) is seeking to lower power plant emissions of mercury, sulfur dioxide, nitrogen oxides, particulate matter, and other air pollutants. These regulations are being undertaken under the federal Clean Air Act.
These new regulatory rules could cause NPA member utilities to close some of their older power plants because the cost to bring them up to the new emissions standards would be more than the plant was worth.
The EPA is tightening these regulations as part of environmental laws passed by Congress in previous decades. Those laws required the EPA to periodically revisit the standards and make improvements based on advances in technology.
None of these planned regulations will address emissions of carbon dioxide (CO2) and other greenhouse gases (GHGs) from power plants. It is possible that regulation of those emissions may be initiated by either the U.S. Congress, the EPA, the Nebraska Unicameral, the Nebraska Department of Environmental Quality, or cities served by NPA members. But at present, emissions of CO2 and other GHGs are not regulated.
Carbon Dioxide Emissions
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.
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.
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 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 us. We have taken steps—and will continue to take steps—to reduce emissions and waste at our power plants and increase recycling of waste materials. Last year our members recycled several hundred thousand tons of coal byproducts, which were used in gypsum wallboard, road paving, and soil stabilization. More than 100,000 tons of flyash from Omaha Public Power District was reused in 2010. Most of that reused material went to make Portland cement, but more than 33,000 tons also went to stabilize soils.
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.