Friday, December 09, 2011

PSEG breaks with EEI over the latter's terrible position on mercury/toxic cleanup

The story of the day comes from us courtesy the National Journal, which reports exclusively that the big NJ-based utility PSEG has broken ranks with the Edison Electric Institute over the latter’s attempts to weaken EPA’s mercury/toxic standards for electric power plants. Please note below.

PSEG Chairman and CEO Ralph Izzo deserves our praise and thanks for his courageous position. (It’s always tough to step out from groupthink like this. Other utility execs have not.) Bravo!

I do want to point out that the story completely verifies what we have been reporting: that EEI – pushed by cleanup laggards American Electric Power and Southern Company – has been seeking not only cleanup delays and loopholes, but to weaken the mercury standard itself. Talk about greed!

What’s the next step? I guess it would make sense to ask EEI what it plans now that its ranks are so openly fractured.

EPA Mercury Rule Ruffles Utility Group
By Amy Harder

Internal rifts within the nation’s largest utility trade group keep popping up as the Obama administration’s new rules for mercury emissions loom.

An executive of a major power company told National Journal he is pulling away from the formal position the Edison Electric Institute has taken in objecting to the Environmental Protection Agency’s mercury standard for power plants, which EPA plans to finalize on Dec. 16.

Ralph Izzo, chairman and CEO of Public Service Enterprise Group, a New Jersey-based utility, said in an interview on Thursday that his company was willing to compromise on delays to the rule, but when EEI started discussing increasing by 20 percent the amount of mercury pollution allowable under the rule, that was the last straw. His company pulled out of the internal negotiations and consensus position two weeks ago.

It remains unclear whether EEI, which chose not to comment for this story, ultimately ended up pitching the higher allowable pollution level to the White House or EPA. The rule is currently going through regulatory review at the White House’s Office of Management and Budget.

“The cumulative weight of the concessions finally came crashing down when the mercury standard began entering into debate,” Izzo said. PSEG’s power generation mostly comes from natural gas and nuclear power—energy sources not affected by EPA’s mercury rule—and about 18 percent from coal, the dirtiest form of electricity, which will be affected the most by EPA’s mercury rule. Coal is also the cheapest and most prevalent, providing nearly half of the nation’s electricity.

Current law requires companies to comply with the rule by 2015.
Izzo said that his company was originally part of a group of EEI member companies that had agreed to EEI’s consensus position despite not being wholeheartedly on board with some of those provisions. Those provisions include a one-year blanket delay for all power companies to comply and the possibility of invoking a presidential exemption that would allow for two or more years to comply if national security was at risk. If a power plant that generates electricity for a military base is shut down because of an EPA rule and grid reliability is jeopardized, the reasoning goes, that could present a national-security concern.

“We weren’t fond of the one-year delay and we weren’t fond of the presidential exemption,” Izzo said. “But in the interest of compromise and getting a rule we could all live with and not spend the rest of eternity battling in the courts … we were willing to compromise on several of those provisions.”

Izzo, who has been with PSEG in various executive positions since 1992, said he has never known a time when his company departed from EEI’s consensus position before.

“EEI does a lot of very good things that we’re supportive of,” Izzo said. “This disagreement would not push me to leave the organization.”
Internal divisions with a trade group as diverse as EEI are not uncommon and should not be surprising despite the media attention such rifts generate. Unity is critical when trying to convince the White House and EPA to delay or change the rule in any significant way, such as whether companies should have blanket extensions to comply or whether mercury pollution levels should be weakened.

While coal utilities like Southern Company and American Electric Power have been the most vocal about asking for more time, even some clean-burning utilities that will be able to comply within three years are fully on board with EEI’s request for more time, further complicating the internal dynamics of the group.

“It’s hard to get anybody’s assurances that they will get the flexibility they need the way the draft rule proposal has been written,” Lewis Hay, chairman and CEO of NextEra Energy, said in a phone interview last week. “That’s why I strongly support the one-year blanket extension.” NextEra Energy is the largest generator of wind and solar power in the country.

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