What is your reaction to how the EPA’s carbon emissions rule might affect your state? What are some ways your state is already prepared and what might be more challenging?
We have not taken a position on the rule, but we’ve engaged tremendously, not only with personnel from the EPA, but also with Arkansas stakeholders.
I must compliment EPA here for their outreach because they have bent over backwards to listen to the states. But, as I’ve said before, this is where the hard work begins because now we are digging into some of the more technical aspects. Is there a baseline, how was the baseline determined, how were the goals formulated, how would a particular state use the four building blocks, are all four building blocks required? Those are just a few.
In Arkansas (verifying assumptions about what the state can achieve) will be among the things that we will tackle. Building Block 3 regarding redispatch, what does that mean in Arkansas? Also Building Block 4, which focuses on energy efficiency programs in Arkansas—We’re really proud of the strong and successful, comprehensive energy efficiency programs that have been underway in Arkansas for several years now.
We in Arkansas plan to use the comment period to provide feedback, and I believe the EPA wants it. I think they also want to hear how we think the rule may need to be tweaked or any formulaic determinations with regard to our state may need to be reevaluated.
It’s still early and so we are still really digging in. The initial thinking of our colleagues is quite diverse, as is our membership. We want to support their work but also where this is an opportunity for consensus, we will certainly strive for that.
Do you foresee your state having a formal or informal stakeholder process?
At the Public Service Commission, we’ve teamed up with Arkansas Department of Environmental Quality to formally create a stakeholder effort. We have about 22 entities represented from industry (all of the electric sector utilities but also one gas utility), environmental groups, the Chamber of Commerce, public policy representatives, commercial and industrial ratepayer groups. Also, both the Public Service Commission and the Department of Environmental Quality participate in the Midcontinent Independent System Operator working group for 111(d) compliance.
Through this work, we are collectively attempting to thoughtfully and deliberately evaluate what the proposed rule means for Arkansas.
We have undertaken this effort to meet every other month with the stakeholder group to jointly analyze the rule together–particularly what the impact will be on our generation in Arkansas, what tools we would have to meet 111(d) and also what the impact will be on ratepayers, ultimately consumers, what it will mean for bills. We’re initially taking an effort at evaluating not only what the proposed rule says, but also our next session will focus on economics.
We want a balanced approach…In addition to the stakeholders I’ve mentioned, the regional transmission organization are represented, both the Midcontinent Independent System Operator and the Southwest Power Pool.
We are also developing comments and we plan to file joint comments with the Department of Environmental Quality. We hope to be informed by all of the stakeholders before we file those comments in mid-October. We want to hear from a diverse array of individuals who will work and would eventually have to comply with this rule if it’s upheld. What are their concerns? What do they like? What elements are they taking an opposite position on? We’ve heard from some stakeholders that the goal for Arkansas may be too high. We’ve heard from diverse stakeholders regarding the economic development impact on 111(d), some that believe through the implementation of the rule more jobs would be created, and of course we’ve heard from those in the business community that have concerns about the impact on jobs.
We also will focus on the timeline.
(On other states’ stakeholder processes): We’re really proud that we have a diverse group of members…But we also have been adept at meeting the needs of our members whatever they may be and not advocating a particular structure for evaluation of the proposed rule, but rather stepping back to allow the states to lead. It is true we have a number of different state processes and some states that don’t necessarily have a process at the moment.
(NARUC does have a task force that will educate members on how the rule works and field questions from various states. NARUC has also been meeting with the National Association of State Energy Officials and the National Association of Clean Air Agencies.)
We’re really focused initially at a higher level on guiding principles…through this consensus-based work we collectively sent a very strong message about the things that are important to not only the regulatory community but the consumer community as well. We emphasized a number of points–one is that the states should be allowed flexibility to develop the plans that work best for each respective state. That the EPA should acknowledge the work of early adopters and that work should get credit.
This interview was conducted at the NARUC summer meetings in July 2014. To see Q&As with commissioners from other states, visit our interactive map. For a broader story about how state regulators from around the country are reacting to the EPA’s carbon emissions proposal, click here.
If you’re a commissioner and didn’t get to talk to Morning Consult at the conference, feel free to contact Emily Holden. We’d love to hear from other state officials and stakeholders too.