Exelon: Industry Can Achieve EPA Carbon Reduction Goals at Low Cost Through Compliance Option That Includes Price on Carbon
April 30 2015 - 1:15PM
Business Wire
Proposal would drive investment in clean energy
while preserving electric system reliability
The Environmental Protection Agency’s proposal to reduce carbon
emissions from existing power plants can be achieved quickly and at
low cost to consumers through a voluntary compliance program that
uses existing market mechanisms to prioritize the use of
emissions-free energy, Exelon Executive Vice President of
Governmental and Regulatory Affairs and Public Policy Joseph
Dominguez told members of the United States Energy Association
today.
Dominguez disagrees with critics who claim EPA’s proposed carbon
rule is unachievable, too costly and damaging to electric
reliability and said they are on the wrong side of history. The
remarks were part of a keynote address at the 2015 USEA Annual
Membership Meeting & Public Policy Forum at the National Press
Club.
“Americans want the power industry to pollute less. They believe
progress in this area is possible, and they are right,” he said.
“As an industry, we have to offer ideas that focus on what we can
achieve, not look for reasons why we can’t. We believe there are
options for reducing carbon on time without causing blackouts,
soaring electricity costs or any of the other doomsday
predictions.”
Dominguez urged EPA to support a proposal to give states a way
to comply with the Clean Power Plan, also known as Section 111(d)
of the Clean Air Act, by imposing a cost on carbon emissions to
make low- and no-emissions energy sources more competitive. The
concept, referred to as Reliability Dispatch Safe Harbor, has broad
support from industry, environmental organizations and trade
groups.
“This is a rare instance where these groups agree, which is a
good basis for EPA to support it,” he said.
Currently, grid operators call upon power plants in order of
their cost to operate. This is a time-tested mechanism for meeting
demand while ensuring that consumers get the best price. However,
the market doesn’t currently factor in the cost of pollution on the
environment and society, Dominguez said.
Under the Reliability Dispatch plan, EPA would determine a
uniform, nationwide price for carbon emissions that would result in
the reductions called for in the Clean Power Plan. Carbon-emitting
power generators in states that opt into the plan would include the
carbon price as a variable cost of operating, and the state would
be deemed in compliance with EPA’s interim target. The additional
carbon price would reflect the true cost of operating high-emitting
plants, resulting in more clean energy sources being dispatched to
the grid based on their lower true cost. High-emitting plants would
remain available to meet demand, ensuring that reliability is not
compromised.
The revenues collected for carbon use could be returned to
consumers, mitigating the costs of the program, Dominguez said.
Exelon estimates that this approach would result in a one-time rate
increase of 2 percent to 5 percent, which is in line with standard
utility rate increases.
Reliability Dispatch would treat all zero-carbon power equally,
providing an incentive to invest in new renewable energy sources,
such as wind and solar, while increasing the competitiveness of
existing clean sources, including nuclear and hydropower. Nuclear
plants are among the most reliable sources of energy on the grid
and are essential to any serious plan to reduce carbon emissions,
Dominguez said. Yet some nuclear plants are at risk of shutting
down due to economic factors and market rules that don’t properly
value the reliability and clean energy that nuclear provides.
“The ability of grid operators to rely on reliable,
emissions-free nuclear plants will be increasingly important as the
nation’s electricity system becomes less reliant on coal and more
reliant on natural gas pipelines and renewable technologies – such
as wind and solar – which are weather-dependent,” Dominguez
said.
Exelon Corporation (NYSE: EXC) is the nation’s leading
competitive energy provider, with 2014 revenues of approximately
$27.4 billion. Headquartered in Chicago, Exelon does business in 48
states, the District of Columbia and Canada. Exelon is one of the
largest competitive U.S. power generators, with approximately
32,000 megawatts of owned capacity comprising one of the nation’s
cleanest and lowest-cost power generation fleets. The company’s
Constellation business unit provides energy products and services
to more than 2.5 million residential, public sector and business
customers, including more than two-thirds of the Fortune 100.
Exelon’s utilities deliver electricity and natural gas to more than
7.8 million customers in central Maryland (BGE), northern Illinois
(ComEd) and southeastern Pennsylvania (PECO). Follow Exelon on
Twitter @Exelon.
Exelon CorporationPaul AdamsCorporate
Communications410-470-4167paul.adams@constellation.com
Exelon (NYSE:EXC)
Historical Stock Chart
From Apr 2024 to May 2024
Exelon (NYSE:EXC)
Historical Stock Chart
From May 2023 to May 2024