Environmental Protection Agency

Clean Power Plan Talking Points July 29, 2014 Page 1 

# R

s

PLATTE RIVER POWER AUTHORITY

Estes Park • Fort Collins • Longmont • Loveland

Re: Clean Power Plan Talking Points

• My name is Deborah Schaneman. I am the Environmental Services and Compliance Director for the Platte River Power Authority in Fort Collins, CO.

• I want to thank you for the opportunity to comment today on the important issue of

carbon emissions.

• Platte River Power Authority is a political subdivision of the State of Colorado. Platte River was formed by the municipalities of Estes Park, Fort Collins, Longmont and Loveland and provides wholesale power to these communities. Like the municipal utilities it serves, Platte River is a non-profit municipal utility.

• In 2013 the Platte River Board of Directors adopted a strategic plan to analyze diversification of our resource portfolio in a manner designed to reduce carbon emissions. The guidance from our Board included a 20% reduction in carbon emission by 2020 and an 80% reduction by 2050. Consequently, the direction from our Board tracks with the pending rulemaking.

• Although I have been immersed in this issue since June 2, as have numerous other staff members at Platte River, as an organization Platte River is still analyzing this complicated proposal. Platte River intends to be fully engaged in this rulemaking process and plans to file detailed written comments at a later date.

• In the time allotted today I will focus on two important concerns.

• First, Platte River has serious concerns about how the four building blocks were analyzed to identify the emission guideline for Colorado. Specifically, we believe that Colorado is being unfairly penalized for being proactive in its approach to carbon emissions. By employing 2012 as a starting point in its analysis, the EPA fails to credit much of what Colorado utilities did during the first decade of this century. Let me give one example. The first building block assumes a 6% efficiency improvement at the generation source. Beginning in 2005, Platte River invested $16.55 million to improve the heat rate of Rawhide unit one north of Fort Collins. These efficiency improvements were completed by 2009 and lowered the heat rate by 4.1%. Additional incremental efficiency improvements are technically possible, but Platte River has already taken the biggest possible bite. Failure to recognize initiatives that occurred prior to 2012 penalizes proactive utilities by disadvantaging them relative to utilities that have failedEnvironmental Protection Agency

Clean Power Plan Talking Points July 29, 2014 Page 2 to address the issue. Moreover, failure to recognize and credit concrete actions taken prior to 2012 results in a state target that is unrealistic.

• Second, the proposed rule establishes an average emission rate for the period 2020 through 2029, which is unnecessary and creates needless administrative difficulties. To achieve the 2030 emissions goal, additions and removals of generation assets will be a significant element of many compliance efforts; this is particularly true for Platte River which does not presently operate any natural gas combined cycle generation. Changes in the makeup of a resource portfolio take long periods of time to plan and implement, and are by their nature "lumpy". The commissioning and/or decommissioning of resources create significant issues associated with rate impacts and reliability. To the extent that significant portfolio changes need to be made subsequent to 2020, it may not be possible to meet the averaged emission rates set forth in the proposed rule. Simply put, the extensive nature of the changes required by this rule means that utilities may reasonably require a glide path longer than the time allowed between the finalization of this rule and 2020 to modify their portfolios. If left unchanged the rule will unavoidably penalize utilities that are undertaking bona fide yet prudent efforts at compliance through modifications of their resource portfolios that necessarily extend beyond 2020. Platte River suggests that the EPA set a reasonable emissions goal for 2030 and trust the states to develop reasonable compliance plans to achieve reductions rather than specifying fixed interim requirements the effect of which may be to complicate compliance.

• In summary, carbon emissions are a significant issue. It is reasonable to expect electric utilities to assist in meeting the challenge involved in curbing carbon emissions. But to ensure the smoothest possible implementation, the final rule must be perceived as fair and subject to effective - but flexible - implementation by the states. Not only must past efforts be recognized and taken into account, but it is also important to ensure that the final rule avoids implementation pitfalls that fail to recognize the practical realities of resource portfolio management and reliable utility operation.

• Thank you again for the opportunity to comment.

Respectfully submitted,

Deborah R Schaneman Environmental Services and Compliance Director