Baton Rouge entrepreneur Scott Van Kerkhove is a political anomaly: a Republican who takes the dangers of man-made climate change seriously. Not because he thinks there’s definitive proof on either side of the issue, but because he thinks the possibility of making the planet uninhabitable for future generations isn’t worth the risk.
Van Kerkhove is CEO of EnergyWise, an energy efficiency and energy management company. He says his business is all about saving its clients money, not saving the world. If a possible action won’t boost the customer’s bottom line, he doesn’t recommend it.
EnergyWise does more than 90% of its business out of state. That’s partly because Louisiana doesn’t yet offer energy efficiency incentives, but not entirely, Van Kerkhove says.
“Some of it has to do with the attitudes and beliefs of business owners and homeowners in Louisiana,” he says. “People in Louisiana have been less receptive.”
Louisiana officials have been less than receptive—putting it mildly—to proposed new U.S. Environmental Protection Agency rules limiting power plant carbon dioxide emissions linked to global warming.
Meeting those standards could be difficult and expensive; but EPA says conserving energy, as folks like Van Kerkhove can help us do, and using more renewable energy will ease the pain. And Louisiana, despite its climate change skepticism, already has taken baby steps in both areas.
EPA is asking Louisiana to cut power plant carbon dioxide emissions by about 40%, much higher than the overall national goal of a 30% decrease. As with other states, it didn’t prescribe how Louisiana should meet its target.
But generally, EPA suggests four basic strategies that states can mix and match as they see fit: Make coal-fired plants more efficient (or move away from coal as much as possible), increase use and efficiency of low-carbon natural gas, use more renewable and nuclear energy, and use less energy overall. Louisiana officials protested the ambitious 40% target assigned to the state, pointing out that we’re not overly coal-reliant and already get more than half of our electricity from natural gas.
On the other hand, Louisiana is one of only a few states that doesn’t offer incentives to curb energy demand, although that’s scheduled to change Oct. 1. Approval of the incentive program was delayed in anticipation of new EPA carbon controls, but the timing could prove to be a useful coincidence.
“Because we have underinvested in energy efficiency historically, we’re going to be capturing some of the most lucrative energy savings,” says Forest Bradley-Wright with the New Orleans-based Alliance for Affordable Energy. Saving energy means power plants burn less fuel, which means less emissions of carbon dioxide and everything else.
The state’s largest utilities are on board. Cleco and SWEPCO have filed proposals with the Louisiana Public Service Commission, while Entergy officials plan to turn its in by mid-July.
The program will offer partial rebates of the cost of energy-saving improvements to homes or businesses. Since utilities recover their expenses from ratepayers, the program essentially would tax anyone who pays an electric bill, which helps explain why last year’s PSC debates on the subject were so contentious.
But proponents argued that paying a little more now leads to savings down the road because you avoid having to build more power plants or transmission lines. The American Council for an Energy-Efficient Economy says a comprehensive efficiency strategy could save Louisiana $4.2 billion through 2030.
As for renewables, EPA says 38 states have specific rules or goals regarding how much of their energy mix should come from renewable resources such as solar, biomass or wind.
Louisiana isn’t one of them.
However, a renewable resource pilot program that ended last year led to several projects worth mentioning.
SWEPCO says it has long-term purchase agreements for 469 megawatts of wind energy from wind farms in Texas, Oklahoma and Kansas. Entergy Louisiana and Entergy Gulf States procured 40 megawatts from several renewable resources that are in operation today, Entergy says. A very rough estimate is that a megawatt is enough energy to power 1,000 homes.
The PSC also enacted standard rates whereby smaller generators can sell power to the utilities. Lafourche Sugars near Thibodaux has taken advantage of that opportunity and sells power to Entergy that it produces by burning a sugarcane byproduct called bagasse. Cleco also has some smaller projects around the state, the PSC says.
So Louisiana has dipped a few toes into the energy efficiency and renewable energy pools. Can these efforts be ramped up to make a serious dent in EPA’s mandate? Not a chance, says PSC Chairman Eric Skrmetta, a Republican, who calls the agency’s goals “unfulfillable.”
“It will have some effect,” he says. “But when you’re looking at the magnitude of what [EPA is] talking about, it’s going to end up having to be met by retrofit of power plants for carbon dioxide capture. I anticipate that to meet these standards it will double the cost of all existing power plants.”
The U.S. Chamber of Commerce has projected a $51 billion annual drag on the nation’s economy. While that estimate was based on a 42% national carbon emissions reduction, not the 30% EPA ended up proposing, the chamber still is predicting doom and gloom. EPA says those concerns are overblown, and says the measures could provide up to $93 billion in climate and health benefits and shrink electricity bills by up to 8% by reducing demand.
Here in Louisiana, low natural gas prices are fueling a renaissance in the state’s chemical business. If high-carbon coal falls out of favor, natural gas demand will increase. But David Dismukes of the LSU Center for Energy Studies doesn’t expect that dynamic to derail projects on the books, since companies making these investments likely expected federal action on carbon and built those expectations into their plans.
Skremetta notes that the Department of Environmental Quality is in charge of formulating the state’s plan of action, not the PSC, which regulates power production generally.
He says it’s too soon to say whether the commission will have a role in the implementation.
Almost certainly, there will be lawsuits filed against EPA over these new proposals. While the Supreme Court already ruled in 2007 that the federal Clean Air Act essentially requires the agency to regulate gases linked to climate change, courts may be asked to determine how far that authority extends.
And while opponents haven’t said so publicly, there’s also the possibility that lawsuits can give states an excuse to drag their feet on implementation, in hopes a future Congress and president will make this all go away.
In June, the U.S. Environmental Protection Agency proposed the Clean Power Plan, in hopes of cutting power sector carbon emissions by 30% nationwide. Louisiana is being asked to cut 40% from its 2012 baseline.
Why propose this rule?
In 2007, the U.S. Supreme Court said EPA under the Clean Air Act should regulate gases linked to global climate change, and Congress has not passed a legislative solution. South Louisiana is particularly vulnerable to rising seas. Proponents say the reductions also will cut harmful particle pollution.
How were state targets determined?
EPA examined each state’s power system as it stood in 2012, then modeled how much each state could reduce emissions by 2030. State targets vary because states have different starting points, as some have done more to reduce emissions than others. The national 30% goal basically is an average of what EPA says is achievable by the states.
How will Louisiana meet its goals?
Each state must formulate its own plan, which may include regional collaboration. The basic “building blocks” are: making fossil fuel plants more efficient, using more low-emission power sources like natural gas, using more zero-emission sources, and using electricity more efficiently. The agency says Louisiana has measures in place that could be part of the solution, including demand-side energy-efficiency programs and energy-efficient building codes.
What happens now?
EPA is accepting comments for 120 days before issuing final rules by next summer. State plans are due by 2016, although lawsuits to prevent or influence implementation are likely. A future Congress and president may amend or repeal the Clean Air Act to eliminate EPA’s authority to address man-made climate change, which skeptics say is an overblown or nonexistent problem.
