Commentary: Don't play politics with electricity

The Fort Worth Star-TelegramSeptember 17, 2011 

If ozone gets a delay, why not coal? And if waiting a few years is good for the U.S. economy, doesn't Texas deserve the same break?

Less than two weeks ago, President Barack Obama reversed course and pulled a draft law to tighten ozone limits because it could hurt business. Ozone levels are now scheduled to be reviewed in 2013, which sounds prudent, given all the worry about creating jobs.

In contrast, new rules on cross-state air pollution, which target emissions from power plants, are supposed to take effect Jan. 1. That's just six months after Texas companies and regulators learned that the state would be included in the law.

If that timeline isn't changed, two coal plants and three mines would be closed in Texas, at least 500 jobs would be eliminated, electricity prices would rise, and the state would become more vulnerable to rolling blackouts, officials testified Tuesday at a state Senate hearing in Austin.

Texas leaders have acted en masse to try to slow the process with the Environmental Protection Agency. All but one member of Congress signed letters to Washington, asking for a reprieve. Regulators and Luminant's parent, Energy Future Holdings, have requested a stay from the EPA. Lawsuits are piling up.

There's never a good time for an economic shock, but this couldn't be much worse. With zero job growth and the threat of a double-dip recession, Obama has proposed a massive jobs plan and yanked the ozone rules.

So why did the president pull those regulations? Sen. Kevin Eltife, R-Tyler, asked at the hearing.

"Craven political cowardice," said Tom Smith, director of Public Citizen's Texas office, reflecting the view of environmental advocates.

But Eltife, whose district would take the bulk of the job cuts from the idled power plants and mines, said he thinks Obama pulled back "because of the economic conditions we're in. This [cross-state rule] is no different."

Eltife has it right. When Smith said many workers at the plants and mines were nearing retirement age, Eltife invited him to explain the layoffs face to face.

"There are no other jobs for these people," Eltife said. "It's time for a reality check."

Luminant, the biggest electricity generator in Texas, says it can't meet the new pollution standard by January without closing the two coal units and three lignite mines.

That's just the start of the damage. The state's power grid would lose significant generation, as Luminant and others scale back coal-fired production. If those reductions had been in place this year, rolling blackouts would have been a certainty last month, said Trip Doggett, CEO of the Electric Reliability Council of Texas, which operates the power grid.

There's also a good chance that Texans will have to pay more for electricity. Providers will have to buy cleaner-burning coal, make system upgrades and trade for emission credits. Some will switch to more expensive natural gas generation. One power company executive said his 400,000 customers in the Panhandle are likely to see a 20 percent increase in rates if the rule is not changed.

Retrofitting and rebuilding power plants for tighter air pollution standards normally takes three to five years. That's been compressed into an impossible time frame, officials said repeatedly.

"It takes our breath away," said Gary Gibbs of AEP Texas.

It doesn't make sense for Obama to propose spending billions to create jobs and then have the EPA take them away and drive up costs for consumers. And the agency seems painfully aware of the contradiction.

In a letter to Luminant, its deputy administrator urged the company not to close facilities and lay off employees, "particularly given the nation's difficult economic situation."

The EPA offered to make technical adjustments and consider other compliance approaches "that would not require you to idle any facility or shut down these mines," Bob Perciasepe wrote.

He said top EPA officials, including Lisa Jackson, have been personally available over past weeks and will continue to make Luminant's situation a priority.

"We are committed to working with you throughout the process," he wrote. "It is important that Luminant demonstrate equal commitment going forward over the coming days."

Luminant CEO David Campbell told the Senate committee that he has been talking with the agency and will continue to do so. But he had not seen any changes in the rules.

The ozone restrictions would have affected thousands of companies, while the cross-state rules hit maybe 500 power plants in the eastern half of the United States, Smith said. And many generators have already made adjustments, anticipating tighter limits.

On that score, if Obama must choose which to delay, the ozone rules would have a bigger impact on the economy. But why force a choice at all?

Several blamed it on politics. State Sen. Troy Fraser, R-Horseshoe Bay, said the EPA appears to be taking harsher action against red states like Texas and Indiana, while giving a break to Illinois and West Virginia.

A better theory is that Obama, who has championed issues like global warming, needs a victory on the environment. Holding firm on cross-state pollution risks less economic damage while reinforcing a commitment to public health.

Except that Obama's EPA will be branded a job killer, with Texas as Exhibit A.

Tap on the brakes, and the feds give everybody more time to adjust.

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