A new report from the North Dakota Transmission Authority (NDTA) claims the impacts of the U.S. Environmental Protection Agency’s (EPA) climate regulations, which sharply restrict greenhouse-gas emissions from coal-fueled power plants, will add hundreds of billions of dollars in unnecessary costs to ratepayers’ bills and significantly reduce the reliability of the electric power grid, causing significant periods of rolling blackouts.
New Rule, Big Impacts
EPA’s finalized 111d/Greenhouse Gas Rule, issued in April and otherwise known as the “Final Carbon Pollution Standards to Reduce Greenhouse Gas Emissions from Power Plants,” requires existing coal-fueled power plants that plan to be in use beyond 2039 to curb their carbon-dioxide emissions by 90 percent by 2032.
The report, conducted for NDTA by Always On Energy Research, concludes that this rule is “not technologically feasible” and “will foreseeab[ly] result in the [premature] retirement” of many of these plants. Further, the report states the premature closing of these plants will reduce the reliability of the Midcontinent Independent Systems Operator (MISO) and Southwest Power Pool (SPP) grid systems, which cover 15 states in the Great Plains, Midwest, and parts of Arkansas, Louisiana, Mississippi, and Texas, as well as all of the Canadian province of Manitoba.
“We determined that the closure of lignite-fired power plants in the MISO & SPP footprints would increase the severity of projected future capacity shortfalls, i.e. rolling blackouts, in the MISO & SPP systems even if these resources are replaced with wind, solar, battery storage, and natural gas plants,” states the report.
High Replacement Costs
The report notes that “building such replacement resources” for these closed plants would “come at a great cost to MISO and SPP ratepayers.”
Replacing the retired coal, natural gas, and nuclear units in EPA’s modeled MISO grid with the new wind, solar, battery storage, and natural gas facilities would cost an additional $381.9 billion through 2055, compared to the current operating costs of the existing components. In the SPP, replacing the retired coal, natural gas, and nuclear units in EPA’s modeled grid with the new wind, solar, battery storage, and natural gas facilities would cost an additional $65.6 billion compared to the costs of operating the existing generation fleet.
Social Cost of Blackouts
“EPA’s modeled SPP grid would experience 8.3 million megawatt hours (MWh) of unserved load during the model run stretching from 2028-2055,” Always On Energy Research’s report concluded. “These blackouts would cost $83 billion based on the Value of Lost Load (VoLL) criteria, which can be thought of as the Social Cost of Blackouts.
“[EPA’s] Finalized Rule will increase costs, which, compounded with inflation, will negatively impact the affordability of electric and gas services, resulting in a disproportionate effect on low-income citizens throughout the MISO and SPP regional grids,” the report says. “Given the high rural populations in North Dakota, pricing low-income citizens out of a reliable energy source creates an economic and social justice issue with devasting impacts on North Dakotans’ lives.”
Purpose: ‘Attack Fossil Fuels’
North Dakota is among 22 states challenging the rule in federal court. North Dakota Attorney General Drew H. Wrigley explained that the rule is nothing more than a brazen attack on fossil fuels by presidential administration obsessed with battling climate change at the expense of average people.
“The Biden Administration pushes a green political agenda with no purpose other than to attack fossil fuels,” said Wrigley, in a statement announcing North Dakota’s participation in the 23 states’ lawsuit. They have filed a petition of review of EPA’s new decree with the U.S. Court of Appeals for the District of Columbia seeking to overturn the new rule.
“Make no mistake, this rule intentionally sets impossible standards to destroy the coal industry,” Wrigley said. “Yet again, the Biden Administration has ignored its statutory limitations and forced the entire country into an alignment with an activist agenda.
“Federal agencies cannot decide on a whim to destroy entire industries. They are only permitted to work within the bounds that Congress set for them,” said Wrigley.
Unelected Bureaucrats Trying to Supplant Congress
This is one more example of the Biden administration’s regulatory overreach, said West Virginia Attorney General Patrick Morrisey in his statement on the petition of review, which West Virginia joined.
“The EPA continues to not fully understand the direction from the Supreme Court—unelected bureaucrats continue their pursuit to legislate rather than rely on elected members of Congress for guidance,” said Morrisey. “This green new deal agenda the Biden administration continues to force onto the people is setting up the plants to fail and therefore shutter, altering the nation’s already stretched grid.”
Coal-fueled power plants produce 55 percent of all electricity generated in North Dakota, which is also the country’s seventh-largest coal producer, compared to just 36 percent for wind and solar, according to the U.S. Energy Information Administration.
Tim Benson (tbenson@heartland.org) is a senior policy analyst with Heartland Impact.
For more on the U.S. EPA’s power plan, click here.
