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The EPA is pushing out a package of rules forcing power plants to slash emissions or shut down, but is it attainable?

On a chilly morning in March, a small crowd gathered atop a bluff on the edge of a farm field south of La Crosse to watch the final dismantling of Dairyland Power Cooperative’s Genoa Station #3 coal generating plant, which was decommissioned in 2021 after more than five decades of reliable power generation. Following an explosive boom, the main building toppled and the emissions stack fell. In a matter of seconds, it was reduced to rubble.

Taking out the rest of the nation’s coal generating plants is proving to take longer than some would like. While burning coal is cleaner than it used to be, it’s still the most carbon-intensive player in the power plant mix. The Biden administration, which set a goal of carbon pollution-free energy by 2035, has taken a bold step in an effort to move coal plant closures along. On April 25, the Environmental Protection Agency (EPA) released a suite of four rules amping up regulations on all the nation’s coal plants, as well as future natural gas plants.

The headliner in the package of rules requires existing coal plants set to operate past 2039 to dramatically reduce emissions beginning in 2032 by using carbon capture and storage (CCS). Coal plants retiring between 2035 and 2039 must also reduce emissions by co-firing with natural gas.

“The path outlined by the EPA is unlawful, unrealistic, and unachievable,” said Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA). “It undermines electric reliability and poses grave consequences for an already stressed electric grid.”

Many utility leaders, like Matheson, argue that CCS is unproven, currently unused at any large-scale operation, and certainly not ready for economy-scale deployment. Only a handful of facilities around the world are actively removing carbon at power plants, and the process is proving to be energy-intensive and expensive. Just building the infrastructure for CCS, including carbon pipelines and underground storage mines, would likely take longer than the rule allows.

“What the rule is doing is basically forcing our hand on generation assets that might have another 15 or 20 years of normal operating life. They’re now being forced out by 2032,” said Ben Porath, Dairyland executive vice president and chief operating officer.

The state and the nation’s dependence on baseload coal generation is diminishing, even without the Biden administration’s shift from encouragement to coercion. Wisconsin’s coal generation dropped from 64% in 2005 to 35% in 2020. Across the country, coal generation made up only about 16% of the power mix in 2023, according to the U.S. Energy Information Administration (EIA.)

While closing coal plants is on trend, they are still vital resources in power production, providing reliable baseload energy, especially in times of extreme heat and cold.

If you head north about 60 miles from the Genoa site, you can’t miss Dairyland’s John P. Madgett (JPM) plant. It also sits along the Mississippi River, just south of Alma, flanked by piles of coal. JPM has been in commercial operation since 1979 and has a generating capacity of 387 MW of electricity.

Brent Ridge at the Genoa demolition.

In March, following the demolition of the Genoa plant, Dairyland President Brent Ridge said the co-op had no plans to shutter JPM.

“Today we saw Genoa’s power plant be demolished. That’s the sixth coal plant that we have decommissioned. Those six plants show our commitment to carbon dioxide reduction,” Ridge said, adding that “We’re going to have fossil fuels including natural gas, and we have two remaining coal plants, and those are going to be in our system for a long time to come. Our mission is to provide safe, reliable, and cost-effective electricity, and that takes an all-of-the-above approach.”

But that was before the EPA rolled out the new power plant rule. The JPM plant’s future is now in jeopardy.

“Logistically, if you look at JPM, there really isn’t any natural gas source that’s close to the facility, so to try and site, permit and construct the infrastructure to pipe natural gas over to the facility, I don’t know what you would be talking as far as millions of dollars, but it’s a pretty big number,” said Brad Foss, Dairyland Power Cooperative’s director, regulatory affairs. He added that, “For carbon capture and sequestration, again, you’re talking about constructing extensive and expensive infrastructure to try and pipe CO2 to existing CCS storage locations in Michigan or Illinois. So again, a lot of money, a lot of permitting, just a lot of issues that take time to work through.”

Dairyland is also a 30% owner of the Weston #4 coal plant. The plant’s majority owner, Wisconsin Electric Group, has announced plans to convert it to natural gas.

“Under the rule, they’d have to co-fire with natural gas at 40% by January 1, 2030, so that’s a pretty quick turnaround too,” Foss said, stressing that the overarching concern is the already mounting risk to reliability as more baseload generation is retired and replaced by intermittent wind and solar. Federal oversight agencies and regional reliability organizations have issued historic warnings about the potential for rolling blackouts, and the power plant rule would further exacerbate the challenges.

“The timelines are really, in my opinion, overly aggressive and unachievable,” Foss said.

The likely forced-closure of most of the nation’s baseload coal generation comes as utilities are seeing the first increase in electricity demand in two decades. The explosion of Artificial Intelligence (AI), a driving force behind the need for data centers that require tremendous amounts of electricity, the nation’s slow but steady transition to electric vehicles, and comprehensive federal efficiency standards prompting electrification of everything from home heating to stoves to lawn mowers is all driving demand up.

“That’s why the Nemadji Trail Energy Center (NTEC) is such an important project to Dairyland and our members, and why we’re working so hard to get it through the regulatory permitting process so we can get it into construction,” Porath said.

NTEC is a proposed state-of-the-art, combined-cycle natural gas facility located in Superior that would have the ability to ramp up quickly when needed to backfill for wind and solar when the sun isn’t shining and the wind isn’t blowing. Dairyland has been navigating the permitting process for NTEC for more than seven years but has yet to break ground. As engineered, the NTEC would be compliant with the rule for new power plants, as long as it operates below 40% capacity.

 

 

 

 

 

 

Before and after: The final dismantling of Dairyland Power Cooperative’s Genoa #3 coal plant, which was decommissioned in 2021 after more than five decades of reliable power generation. Photo illustration by WECN.

While the power plant rule is getting the most attention, the EPA also issued final rules that ramp up regulations on emissions from mercury and other toxins, increase limits on wastewater, and add stringent requirements for the disposal of coal ash (CCR), all of which will have a significant impact on the industry.

“From Dairyland’s perspective, we have four CCR landfills that are likely to be subject to the rule, and again, timelines come into play where we may have to initiate closure which could include removal of the ash from those landfills within 42 to 54 months after the rule is published, which again, could cost hundreds of millions of dollars,” Foss said. Dairyland also has two landfills that will likely be impacted by the wastewater (Effluent Limitations Guidelines) rule, which requires technology to recycle 100% of the leachate from those landfills by December 31, 2034.

The Biden administration also rolled out new rules on energy permitting, a priority for both Republicans and Democrats, to get more clean energy on the grid and expedite the transmission projects needed to accommodate it. Dairyland is a minority owner in the Cardinal-Hickory Creek transmission line, which would support more than 160 new renewable energy projects but has faced years-long delays and increased costs. It is a poster child for the need for permitting reform on Capitol Hill.

The new National Environmental Policy Act (NEPA) rule requires federal agencies to work together to streamline the permitting process, and sets two-year time limits for some environmental reviews, but opponents say it also adds unnecessary hurdles to the public comment process.

Dairyland Power Cooperative’s John P. Madgett (JPM) plant, located just south of Alma, has been in commercial operation since 1979 and has a generating capacity of 387 MW of electricity. The EPA’s new power plant rule now puts the JPM plant’s future in jeopardy.

Porath says permitting reform has only been mildly effective in the past and is only part of the answer. What lawmakers really need to tackle is tort reform, as repeated legal challenges often have open-ended timelines. “With the Cardinal-Hickory Creek project, we were close to two years on the environmental permitting, but it’s the legal challenges that have caused the real delays,” he said.

Dairyland and its partners in the Cardinal-Hickory Creek transmission line project (ATC and ITC Midwest) recently got the go-ahead to complete the final 1.2 miles of line when an appeals court overturned a lower court’s ban last month.

Since repeated legal challenges have held up the Cardinal Hickory line for years, just imagine what it might take to build a carbon pipeline to Alma.

But the legal system works both ways, and opponents of the new rules, including NRECA, have already filed suit against the EPA, challenging the power plant rule. A similar rule implemented under the Obama administration in 2015 was stayed through litigation that dragged on until June of 2022, when the U.S. Supreme Court ruled the EPA had exceeded its authority.

But this is an election year, of course, and Donald Trump is making bold promises that, if elected, he will undo many of Biden’s climate-related actions. Trump took sweeping action against Obama administration rules using the Congressional Review Act (CRA), but the Biden administration rolled out these rules in time to beat the CRA’s 60-day clock, should Trump win in November. He could write new rules to replace Biden’s power plant rules, but that would take some time.

Missing from this package of rules aimed at lowering emissions at the nation’s power plants are new regulations for existing natural gas plants, which provided 43% of the nation’s electricity generation last year. The Biden administration plans to roll those out in 2025.—Julie Lund

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