Greenhouse-gas regulations draw cries of doom, boon

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The proposed greenhouse-gas regulations that critics contend will drag down the economy are receiving praise from others as a boon for the construction industry.

Both sides, though, are being a bit hasty with their predictions, utility officials and observers said Monday.

To curb pollutants blamed for global warming, the Obama administration released a plan Monday to cut emissions of carbon dioxide from power plants by nearly a third during the next 15 years. Rather than mandate how the goal would be reached, the government proposed giving states until 2017 at the earliest to put forward compliance plans.

Yet, despite the delayed deadline, both advocates and critics of the proposed rule were making predictions Monday about how many jobs would be created or eliminated.

“All this means more jobs, not less,” said Gina McCarthy, administrator of the Environmental Protection Agency, according to a transcript of remarks she made in Washington, D.C., shortly after announcing the proposed regulations. “We’ll need thousands of American workers in construction, transmission and more to make cleaner power a reality.”

But Scott Manley, vice president of government relations for Wisconsin Manufactures and Commerce, said any temporary gain in construction employment would be more than offset by the thousands of jobs he and others maintain would be lost in the manufacturing industry when the new pollution-control measures cause employers’ electricity bills to spike.

Neither side has much of a foundation for its predictions, said Mark Thimke, a Milwaukee-based energy and environmental lawyer. Thimke said the federal proposal gives states a lot of leeway to decide exactly how to put the new regulations into effect.

The options include making power plants more efficient, reducing the frequency at which coal-fired power plants supply power to the grid, and investing in more renewable, low-carbon sources of energy.

“We are really going to have to see what the plans are,” Thimke said.

Nathan Conrad, a spokesman for the Public Service Commission of Wisconsin, the state’s utility regulator, said the federal proposal probably would result in an increase in electricity rates. Still, he said, it’s too early to say with certainty what ratepayers should prepare for.

Wisconsin gets about 63 percent of its energy from coal, according to the Energy Information Administration. The state’s 2012 carbon emission rate was more than 1,800 pounds per megawatt hour of energy produced. The EPA is asking the state to develop a plan to lower its emission rate to about 1,200 pounds.

One reason for uncertainty about the price tag of bringing the state into compliance is that Wisconsin investor-owned utilities have made strides toward reducing emissions of greenhouse gases, according to a December report conducted by the World Resources Institute. The Washington, D.C.-based research organization found that Wisconsin utilities had reduced their emissions of carbon dioxide by 14 percent from 2005 to 2011 and were on track to reduce them by another 10 percent from 2011 to 2020.

The group concluded that Wisconsin utilities could meet the federal government’s goals by running existing natural-gas plants at full capacity or retrofitting coal-fired plants to make them operate more efficiently. The state also could set higher requirements for the production of energy from renewable sources, a proposal that could be a boon to the construction industry but has not been embraced by the Republicans who now control the statehouse.

In a letter sent to protest the EPA’s expected regulations, the PSC and the Wisconsin Department of Natural Resources noted that Wisconsin utilities have spent more than $3.2 billion since 2000 on equipment meant to curtail air pollution and save energy. In the same period, according to the letter, utility companies spent more than $4.5 billion on equipment needed to produce an additional 4,200 megawatts from coal and gas.

The new coal units, such as one added to Milwaukee-based We Energies’ Oak Creek Power Plant, are among the cleanest in the country, said Brian Manthey, We Energies spokesman. As for older plants, Manthey said, the trouble is that no one has yet invented technology that can be installed on existing units to scrub out and capture carbon dioxide and other greenhouse gases, as is now done for sulfur dioxide, particular matter and other pollutants.

The final option, then, is to turn a coal-fired plant into one that runs on natural gas, as We Energies is doing with a $70 million conversion of its Valley Power Plant in Milwaukee. Manthey said utility officials, though, would be wary of relying too heavily on natural gas.

“As a utility,” he said, “you want to take advantage of gas when gas prices are low and then coal when coal prices are low.”

The PSC argued in its December letter that We Energies and other utilities should get credit under the new federal regulations for the already-completed improvements. The rules put forward Monday appear to heed that request.

The EPA’s proposal would make states responsible for reducing greenhouse gas emissions below the 2005 level, meaning any projects completed since then would be taken into account. The progress already made is just another of the moving parts that makes predictions difficult, Thimke said.

“The rule is not going to be final for a year,” he said. “It’s going to be fully litigated, and then there’s going to a be a transition period.

“So there’s a long lag until the time it actually starts taking a real bite.”

The Federal News Service and The Associated Press also contributed to this report.