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 started in 2011, we opened up a docket asking our utilities to provide us information about how they intended to comply with a menu of environmental regulations, including the Cross-State Air Pollution Rule, Mercury and Air Toxics Standards and (cooling water intake regulations). We had a whole list of questions. Then, sometime probably last year, we issued another order asking our utilities to update their responses in light of the impending carbon regulations. At that time we also reached out to our air regulators to begin that dialogue, because we knew that there was going to be a significant role for us to play as economic regulators with respect to reliability and affordability.
Fast forward now to June 2nd when the proposal was issued, I think the biggest challenge for us right now is to stay calm and to do the analysis to verify the EPA’s target. What we’re going to be really doing now—in anticipation of final comments in October—is to take a look at each of the EPA’s four building blocks that they applied in Missouri and verify that or discern whether we agree with how they applied the formula of building blocks, test those assumptions to ensure that we agree with the target at which they arrived.
So that’s really the first step from my perspective—is to ensure the target is achievable and the way that we verify and determine whether the target is achievable is to take the four building blocks that they applied in our state and verify the underlying assumptions.
So for instance, the six percent heat rate improvements and electric generating units that was assumed, we need to confer with our electric utilities our municipals and our electrical cooperatives and determine whether or not six percent heat rate improvements are possible. I think that’s going to be a challenge, particularly trying to do that in the next 120 days.
Do you foresee your state having a formal or informal stakeholder process?
We have an open docket, and we’ve reached out to our, our air regulators. And our air regulators are also convening a stakeholder process in which we will participate and they’ve had conversations about electric utilities also and were going to participate in those processes also.
Do you feel your role and responsibilities as a state regulator are evolving? Why or why not?
The role of the regulator I think to a significant degree is evolving and expanding. We are first and foremost economic regulators. We have to ensure affordable, reliable, safe, secure provisions of utility services…As the utilities are changing our regulatory models are going to necessarily change. I think that we also have a role to play in educating consumers.
I think we are uniquely to be honest workers of objective information—we don’t have a pecuniary interest, and we’re supposed to be functioning in the public interest. I think that gives us a unique position of public trust, to be able to go out there and educate the public.
What are some of the biggest energy issues facing your state?
(Section 111(d) of the Clean Air Act) is but one component. I mean were grappling with a lot of the same things that other states are dealing with—the integration of distributed energy resources, most of our electric utilities have filed or will be filing for rate increases so we will be dealing with that…we’ve got merchant transmission lines that are looking to locate in Missouri that are creating complications for us. Our largest industrial consumer filed a complaint case against our largest electrical supplier. So we’ve got a lot of issues that we are dealing with that are keeping us extraordinarily busy.
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.