New EPA Rules Mean Changes for Indiana Power Plants

Aug 6, 2015

Renewable energy, such as wind farms, is one way Indiana could work toward meeting EPA-established carbon reduction goals by 2030.
Credit Daniel X. O'Neil (Flickr)

Indiana must reduce the carbon dioxide its power plants emit by about a third in the next fifteen years.

The mandate comes as part of new Environmental Protection Agency rules President Obama announced this week. The rules require each state to put together a plan on how it will reach the new EPA goals.

The sound of dump trucks and 80-foot cranes moving steel beams fills a small, windy county road outside of Martinsville. The construction means there will soon be not one but two large power plants standing side by side.

That’s because Indianapolis Power and Light plans to shut down its existing coal-fired power plant. The company says it’s not economically viable to upgrade the plant to meet EPA regulations, so instead, it’s building an entirely new power plant right next door that will run on natural gas—which produces fewer air pollutants, including about half as much carbon dioxide.

“This transition is already happening. The power sector across the country and here in Indiana is moving away from coal,” said Jodi Perras, the Indiana Representative for the environmental group the Sierra Club.

“Our power plants are old, they’re looking at when are we going to retire them? So the question is what are we going to replace that with?” Perras asked. That’s a question Indiana is going to have to answer soon. Power plants are the biggest contributor to carbon emissions, so the EPA is requiring states reduce the amount of carbon dioxide those power plants produce.

In Indiana’s case, it can choose from two options: cut its total carbon emissions from power plants by 28 percent or cut the amount of carbon dioxide produced per megawatt hour by 38 percent.

Switching to natural gas could go a long way to meeting that goal, but because of environmental concerns about fracking, Perras would rather Indiana to achieve the EPA goal by producing more renewable energy.

“We need to require utilities to generate more energy from wind and solar,” she said. “Iowa already is generating about 25% of its energy from wind. Indiana, about 3 to 4 percent.”

The president of the Indiana Coal Council Bruce Stevens, though, is pushing for more investment into cleaner coal technology.

“Since 1970 the emissions from coal fueled power plants have decreased tremendously 80-90 percent, sulfur and nitrogen…while we’re producing 100 percent more electricity from coal. You can’t get the same BTU from wind….or from solar panels,” Stevens said.

Stevens says if the EPA gave the coal industry more time, it could adapt, as it has in the past. But he says the EPA isn’t giving them a chance.

“We feel this is an environmental agency within the federal government that is in essence trying to seize control of the power grid, rather than implement the actual environmental regulations and that they are attempting to impact one energy source much more than any other and as a result are trying to do away with the most affordable and reliable source of energy the state of Indiana has,” he said.

The EPA’s rule also allows state to opt for what’s called a cap and trade program. That would allow Indiana to pay another state to reduce its carbon emissions more and Indiana would get the credit.

Right now, though, state officials are hoping the EPA rules won’t go into effect. Indiana and 14 other states are joining a lawsuit against the EPA. The Indiana Attorney General called it an “overreach of historic proportion.”

Indiana Energy Association President Mark Maasel represents some of the state’s largest utility companies. He argues the EPA rules will increase electricity rates.

“Ultimately if the rule is determined to be legal, if the rule is determined to be something that makes sense, we’re going to have to deal with that outcome,” Maasel said. “But I also think that Indiana customers should not be asked to pay for something that down the road, the courts may decide was not done legally.”

Gov. Pence is reviewing the EPA rules to determine if Indiana will comply with the rules. If he decides to comply, or if Indiana is forced to do so, the state will likely have to come up with a plan that include several carbon reduction measures.

Jodi Perras with the Sierra Club says what’s important is that Indiana doesn’t drag its feet.

“To put your head in the sand and say we’re not going to face any carbon dioxide pollution and we’re going to fight this with every tooth and nail is just a huge mistake,” Perras said. “Instead what we ought to be doing is rolling up our sleeves and saying carbon regulation is coming. What are we going to do about that?”

Unless the courts halt the EPA’s rule, Indiana will be required to submit a carbon reduction plan within the next nine months.