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Carbon clash: North Dakota utilities brace for new EPA regulations

NEAR UNDERWOOD, N.D.--Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity.

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Ethan Vaagene stands between the powerplant's stacks at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)
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NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity. There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance. It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half. The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal.
"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them." Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them. In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA. North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration. "We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time." The regulation The Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state. The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES. [[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year. Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House. Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon. "What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative. Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES. But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA. [[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030. What changed? The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation. "It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges." The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution. "North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is." One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation. "So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule. Regional cooperation Crabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added. [[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said. But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown." "We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?" Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough. "I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions." Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines. "We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said. Coal's role Two orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity. The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year. Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power. About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan. North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin. Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation. "Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively." That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.” [[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions. "I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar. "There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said. Environmental concerns North Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal. "You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said. The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent. That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards. For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said. "The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said. Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology. "You don't have to leave coal behind if you're concerned about global warming," she said. Legal fight North Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule. Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week. Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants. Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability. Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said. Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health. "I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen." Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants." "I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity. There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance. It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half. The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal. [[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them." Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them. In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA. North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration. "We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time." The regulation The Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state. The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES.
States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year. Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House. Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon. "What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative. Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES. But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA. [[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030. What changed? The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation. "It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges." The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution. "North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is." One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation. "So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule. Regional cooperation Crabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added. [[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said. But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown." "We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?" Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough. "I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions." Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines. "We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said. Coal's role Two orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity. The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year. Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power. About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan. North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin. Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation. "Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively." That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.” [[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions. "I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar. "There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said. Environmental concerns North Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal. "You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said. The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent. That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards. For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said. "The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said. Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology. "You don't have to leave coal behind if you're concerned about global warming," she said. Legal fight North Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule. Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week. Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants. Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability. Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said. Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health. "I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen." Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants." "I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity. There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance. It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half. The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal. [[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them." Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them. In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA. North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration. "We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time." The regulation The Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state. The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES. [[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year. Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House. Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon. "What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative. Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES. But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA.
Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030. What changed? The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation. "It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges." The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution. "North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is." One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation. "So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule. Regional cooperation Crabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added. [[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said. But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown." "We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?" Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough. "I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions." Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines. "We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said. Coal's role Two orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity. The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year. Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power. About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan. North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin. Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation. "Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively." That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.” [[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions. "I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar. "There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said. Environmental concerns North Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal. "You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said. The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent. That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards. For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said. "The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said. Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology. "You don't have to leave coal behind if you're concerned about global warming," she said. Legal fight North Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule. Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week. Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants. Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability. Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said. Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health. "I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen." Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants." "I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity. There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance. It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half. The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal. [[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them." Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them. In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA. North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration. "We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time." The regulation The Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state. The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES. [[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year. Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House. Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon. "What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative. Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES. But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA. [[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030. What changed? The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation. "It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges." The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution. "North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is." One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation. "So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule. Regional cooperation Crabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added.
The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said. But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown." "We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?" Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough. "I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions." Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines. "We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said. Coal's role Two orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity. The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year. Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power. About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan. North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin. Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation. "Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively." That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.” [[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions. "I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar. "There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said. Environmental concerns North Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal. "You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said. The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent. That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards. For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said. "The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said. Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology. "You don't have to leave coal behind if you're concerned about global warming," she said. Legal fight North Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule. Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week. Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants. Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability. Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said. Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health. "I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen." Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants." "I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity. There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance. It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half. The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal. [[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them." Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them. In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA. North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration. "We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time." The regulation The Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state. The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES. [[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year. Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House. Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon. "What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative. Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES. But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA. [[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030. What changed? The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation. "It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges." The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution. "North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is." One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation. "So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule. Regional cooperation Crabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added. [[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said. But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown." "We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?" Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough. "I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions." Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines. "We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said. Coal's role Two orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity. The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year. Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power. About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan. North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin. Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation. "Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively." That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.”
But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions. "I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar. "There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said. Environmental concerns North Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal. "You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said. The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent. That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards. For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said. "The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said. Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology. "You don't have to leave coal behind if you're concerned about global warming," she said. Legal fight North Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule. Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week. Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants. Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability. Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said. Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health. "I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen." Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants." "I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity.There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance.It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half.The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal.
"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them."Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them.In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA.North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration."We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time."The regulationThe Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state.The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES.[[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year.Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House.Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon."What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative.Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES.But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA.[[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030.What changed?The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation."It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges."The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution."North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is."One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation."So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule.Regional cooperationCrabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added.[[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said.But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown.""We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?"Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough."I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions."Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines."We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said.Coal's roleTwo orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity.The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year.Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power.About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan.North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin.Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation."Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively."That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.”[[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions."I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar."There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said.Environmental concernsNorth Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal."You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said.The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent.That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards.For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said."The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said.Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology."You don't have to leave coal behind if you're concerned about global warming," she said.Legal fightNorth Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule.Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week.Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants.Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability.Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said.Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health."I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen."Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants.""I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity.There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance.It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half.The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal.[[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them."Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them.In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA.North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration."We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time."The regulationThe Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state.The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES.
States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year.Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House.Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon."What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative.Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES.But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA.[[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030.What changed?The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation."It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges."The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution."North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is."One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation."So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule.Regional cooperationCrabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added.[[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said.But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown.""We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?"Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough."I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions."Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines."We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said.Coal's roleTwo orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity.The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year.Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power.About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan.North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin.Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation."Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively."That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.”[[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions."I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar."There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said.Environmental concernsNorth Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal."You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said.The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent.That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards.For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said."The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said.Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology."You don't have to leave coal behind if you're concerned about global warming," she said.Legal fightNorth Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule.Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week.Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants.Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability.Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said.Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health."I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen."Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants.""I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity.There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance.It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half.The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal.[[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them."Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them.In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA.North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration."We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time."The regulationThe Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state.The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES.[[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year.Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House.Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon."What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative.Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES.But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA.
Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030.What changed?The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation."It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges."The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution."North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is."One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation."So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule.Regional cooperationCrabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added.[[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said.But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown.""We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?"Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough."I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions."Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines."We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said.Coal's roleTwo orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity.The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year.Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power.About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan.North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin.Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation."Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively."That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.”[[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions."I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar."There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said.Environmental concernsNorth Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal."You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said.The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent.That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards.For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said."The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said.Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology."You don't have to leave coal behind if you're concerned about global warming," she said.Legal fightNorth Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule.Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week.Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants.Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability.Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said.Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health."I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen."Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants.""I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity.There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance.It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half.The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal.[[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them."Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them.In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA.North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration."We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time."The regulationThe Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state.The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES.[[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year.Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House.Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon."What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative.Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES.But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA.[[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030.What changed?The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation."It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges."The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution."North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is."One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation."So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule.Regional cooperationCrabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added.
The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said.But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown.""We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?"Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough."I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions."Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines."We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said.Coal's roleTwo orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity.The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year.Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power.About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan.North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin.Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation."Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively."That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.”[[{"type":"media","view_mode":"media_large","fid":"1991190","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","style":"font-size: 13.008px; line-height: 1.538em;","title":"","width":"480"}}]]But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions."I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar."There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said.Environmental concernsNorth Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal."You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said.The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent.That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards.For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said."The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said.Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology."You don't have to leave coal behind if you're concerned about global warming," she said.Legal fightNorth Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule.Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week.Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants.Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability.Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said.Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health."I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen."Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants.""I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."NEAR UNDERWOOD, N.D.-Standing on the roof of Great River Energy's Coal Creek Station, North Dakota's largest coal-fired power plant, Ethan Vaagene can point out a handful of other facilities generating electricity.There's the Lelands Old Station sitting on the Missouri River a few miles away and the Milton R. Young Station south of that. A dragline excavator marks a coal mining site nearby, and wind turbine blades spin silently in the distance.It's in this west-central region of North Dakota where the U.S. Environmental Protection Agency's Clean Power Plan is hitting closest to home. The final rule issued last month requires North Dakota power plants to cut their carbon dioxide emissions almost in half.The regulation drew an immediate backlash from North Dakota's congressional delegation, with Democratic Sen. Heidi Heitkamp calling it a "slap in the face." Utility executives say they wonder how they could meet the EPA targets in the coming years without raising electricity rates and affecting system reliability, given that much of the electricity here is generated by burning lignite coal.[[{"type":"media","view_mode":"media_large","fid":"1991185","attributes":{"alt":"Lyndon Anderson walks next to a generator at Great River Energy's Coal Creek Station (Logan Werlinger)","class":"media-image","height":"320","title":"","width":"480"}}]]"I think it's a large enough goal that it's going to require significant changes in the way that we generate and use electricity in North Dakota over time," said Brad Crabtree, vice president of fossil energy at the Great Plains Institute. "A number of these things would have been driven in the marketplace anyway, but not all of them."Some company leaders floated the possibility coal plants would close to meet the emissions target, but said they're still working to understand how the regulation will affect them.In issuing the rule, the Obama administration cited environmental and health effects of carbon dioxide, the primary contributor to greenhouse gases. Electric power facilities accounted for almost a third of greenhouse gas emissions in the U.S. in 2013, according to the EPA.North Dakota's electricity sector ranked fifth in the nation for its carbon dioxide emissions rate that year, according to the U.S. Energy Information Administration."We think it's absolutely time to set limits on carbon pollution," said Noah Long, director of the Western Energy Project at the Natural Resources Defense Council. "Many states haven't tackled the issue of carbon pollution, and this rule will require states to do that for the first time."The regulationThe Clean Power Plan, issued under the EPA's Clear Air Act, aims to reduce carbon pollution from power plants by 32 percent below 2005 levels by 2030 by setting reduction goals for each state.The EPA considered things such as each state's mix of fossil fuel generation and levels of CO2 emissions when calculating the state targets, according to the Center for Climate and Energy Solutions, or C2ES.[[{"type":"media","view_mode":"media_large","fid":"1991186","attributes":{"alt":"Troy Danielson (from left), Monte Butler, and Ethan Vaagene in the control room at Great River Energy's Coal Creek Station","class":"media-image","height":"320","title":"","width":"480"}}]]States must develop, either on an individual or multistate basis, a plan for reducing emissions or request an extension in a year.Final plans for individual states are due in June 2017, with multiple-state plans due in June 2018. Compliance begins in 2022 with emissions reductions phased in on a "glide path" to 2030, according to the White House.Utility executives say that's a quick turnaround that may lead to big decisions about their operations soon."What is a fear on my part is that we'll make irreversible or irrevocable decisions, and you might look like a hero or you might look like an idiot," said Robert "Mac" McLennan, president and CEO of Grand Forks-based Minnkota Power Cooperative.Options for meeting the emissions target include substituting natural gas for coal, improving energy efficiency and increasing reliance on renewable energy, according to the C2ES.But McLennan said a lack of pipeline and related infrastructure as well as the "stranded assets" from shutting down coal plants prematurely makes switching to natural gas difficult. He added that utilities in North Dakota already have "significant" renewable energy sources-almost 16 percent of net electricity generation in the state came from wind energy in 2013, according to the EIA.[[{"type":"media","view_mode":"media_large","fid":"1991187","attributes":{"alt":"Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D. (Logan Werlinger/Grand Forks Herald)","class":"media-image","height":"320","title":"","width":"480"}}]]Still, the EPA expects the savings from increased energy efficiency will outweigh the costs of implementing the plan, reducing monthly household electric bills by $7 in 2030.What changed?The release of the Clean Power Plan in its final form in early August surprised North Dakota officials with a major jump in its emissions goal. The initial proposal released last year gave North Dakota an 11 percent emissions reduction target, which shot up to nearly 45 percent in the final rule, the third-biggest cut in the nation."It was a lot easier to visualize how you could preserve the industry and still achieve the goal initially," said John Weeda, director of North Dakota generation at Great River Energy. "And now it does present us some significant challenges."The final rule calculates its goals for each state in a "totally different" and arguably more uniform way than last year's proposal, said Philip Wallach, a fellow at the Brookings Institution."North Dakota was definitely one of the big losers from the proposed rule to the final rule," he said. "The proposed rule, in some ways, was a little easier on coal-heavy states than the final one is."One of the main reasons for the change was the EPA's shifting its focus from individual states to setting standards for energy sources themselves, said Joseph Goffman, the associate assistant administrator and senior counsel in the EPA's Office of Air and Radiation."So now, whether you're looking at California or whether you're looking at North Dakota, the state target reflects nothing more than the number of coal plants and the number of natural gas plants operating within the state's jurisdiction," Goffman said, adding that the change was in part driven by public comments over the proposed rule.Regional cooperationCrabtree said the final rule narrows the gap between the states with the least stringent and most stringent targets. That may help lead to states pursuing "multistate and regional cooperation to reduce the costs of complying with the Clean Power Plan," he added.[[{"type":"media","view_mode":"media_large","fid":"1991189","attributes":{"alt":"The inside of a blower at Great River Energy's Coal Creek Station on Wednesday, August 19, 2015, in Underwood, N.D.","class":"media-image","height":"480","title":"","width":"320"}}]]The rule makes it easier for states to "link their compliance" by trading emissions credits, which creates "much less concern and much less question about the stringency in one state versus the stringency in another," Long said.But Dale Niezwaag, senior legislative representative at Basin Electric Power Cooperative, called those emissions credits a "huge unknown.""We don't know where those credits are going to come from," he said. "Are there going to be enough available to keep a coal plant going? And if they are available, at what cost?"Some blamed politics for the major swing in emissions targets. Rep. Kevin Cramer, R-N.D., said the "religion of climate change trumps everything else" for the Obama administration, and Heitkamp said environmentalists were upset with the proposed rule because they felt it didn't go far enough."I think this is a legacy piece for this administration," Heitkamp said. "And I think they have people in this administration making a decision on this who have never run the grid, who have never confronted the challenges of long-term baseload power decisions."Goffman pointed to a "safety valve" included in the plan that temporarily relaxes emissions standards in the case that grid reliability is threatened. He also cited the ability of states to work together to meet their goals and the "glide path" nature of the compliance deadlines."We think if they take advantage of that opportunity, it will go a long way to ensuring that the rate impacts are manageable and that reliability is maintained," Goffman said.Coal's roleTwo orange turbine generators hum loudly in a large open room at the Coal Creek Station, a facility that was built in 1974 and employs more than 200 people. Steam, created by burning coal and heating water pipes, spins the turbine blades and generates upward of 1,100 megawatts of electricity.The plant uses up to 22,000 tons of lignite a day, which translates to 7.5 or eight million tons a year.Coal-fired power plants such as Coal Creek account for almost 80 percent of North Dakota's net electricity generation, according to the EIA. The rest comes from wind energy and some hydroelectric power.About half of Minnesota's electrical generation comes from coal-fired plants, with renewables, nuclear, petroleum and natural gas sources providing the rest, according to the EIA. Minnesota has a 40 percent emissions reduction target ahead of it in the Clean Power Plan.North Dakota actually has a larger coal supply than the state's customers can demand, thus Coal Creek Station's electricity runs on a DC transmission line to Great River Energy's customers in Minnesota and Wisconsin.Lignite coal's abundance and cost effectiveness-western North Dakota has an 800-year supply, and it's found near the Earth's surface-means North Dakota's average retail price of electricity is among the lowest in the nation."Power plants fueled by lignite coal are the backbone of the region's electric grid," McLennan wrote in a letter to the Herald earlier this month. "They run reliably around the clock, and they do so cost-effectively."That makes the Clean Power Plan problematic, he said. McLennan’s initial analysis of the 1,560-page rule suggests “that there is no way North Dakota” can meet the 45 percent emissions reduction “without either shutting down some of the state’s coal plants or operating them at drastically reduced levels.”
But even the plan's supporters expect coal to remain a part of U.S. electricity generation after the regulation is fully implemented in 2030. The EPA's modeling of the final rule estimates that coal will make up about 27 percent of electric generation in 2030, down from the 36 percent under a "business-as-usual" scenario, according to the Center for Climate and Energy Solutions."I think it would be probably premature to announce the end of coal altogether at this point," said Long, adding coal's share of the energy mix has declined as other sources have become more cost-effective. Long expects the Clean Power Plan to make "even more headway" for renewable energy resources like wind and solar."There's no reason to think that North Dakota can't avail itself of those resources just as many other surrounding states have," he said.Environmental concernsNorth Dakota's high carbon dioxide emissions rate can be partly explained by North Dakota's reliance on low-rank lignite coal."You have to burn more lignite to produce the steam to drive the generators than you do if you use a Wyoming coal," Niezwaag said.The Coal Creek Station has tried to mitigate that by using a unique system to dry and refine the supply it gets from the nearby Falkirk Mine, reducing its carbon emissions by 4 percent.That's one development that North Dakota energy officials cite in arguing that they've worked to become more efficient. Lignite-fired plants have spent about $2 billion on technology aimed at reducing emissions over the years, according to the Lignite Energy Council, helping make North Dakota one of seven states to meet all of the EPA's ambient air quality standards.For its part, Great River Energy has spent about $200 million in environmental technology at the Coal Creek Station since it was built. But that means less room to find additional efficiencies, Weeda said."The options we have left available to us at Coal Creek are a fairly short list because we have been very aggressive throughout the past years of improving the efficiency," he said.Carbon capture technology holds some promise of reducing emissions from coal-fired power plants, but it doesn't yet exist on a commercially viable scale, said Jason Bohrer, president and CEO of the Lignite Energy Council. Heitkamp advocated for policies that encourage the development of clean coal technology."You don't have to leave coal behind if you're concerned about global warming," she said.Legal fightNorth Dakota already has hinted at a legal fight over the Clean Power Plan. Attorney General Wayne Stenehjem said last month that his office was considering its own standalone lawsuit, adding that North Dakota had been treated "more harshly" than other states in the final rule.Stenehjem's office isn't commenting on potential lawsuits at this time, an official there said last week.Emily Hammond, an energy law professor at George Washington University, said there is a "laundry list" of potential legal challenges, including the EPA's authority under the Clean Air Act and arguments that the regulation goes "beyond the fenceline," or overreaches past the operations of individual plants.Courts also likely will examine whether the EPA's approach was "arbitrary and capricious," Hammond said, which would include determining whether the agency adequately considered things such as grid reliability.Basin Electric supports a stay of the rule to "find out what the legalities are, if it's legal what they're doing before we make all of these irrevocable decisions," Niezwaag said.Although legal challenges are looming, state officials are considering their options for complying with the rule. Absent a state plan, the EPA will implement a federal one, said Dave Glatt, chief of the environmental section at the North Dakota Department of Health."I think we need to look at developing a plan that's right for North Dakota," he said. "Whether or not that meets all the goals and timelines that EPA established, that remains to be seen."Sen. John Hoeven, R-N.D., said he's arranging a meeting between industry officials in North Dakota and EPA Administrator Gina McCarthy. He wants her to show how the Clean Power Plan "works and how it can be realistically met without driving up costs and closing down plants.""I want good environmental stewardship, I believe our industry wants good environmental stewardship," Hoeven said. "But it's got to be in a realistic way."

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