Understanding the EPA’s Clean Power Plan

On August 3, the U.S. Environmental Protection Agency (EPA) released its finalized Carbon Pollution Standards for Existing Power Plants (known as the Clean Power Plan). These are the first-ever national standards that address carbon pollution from power plants. According to the EPA, the plan is projected to reduce carbon emissions in the power sector by 32 percent by 2030 compared to 2005 levels.

What is in the EPA's Clean Power Plan?

The Clean Power Plan establishes different target emission reductions for carbon dioxide (CO2) for each state due to regional variations in generation mix and electricity consumption. A target for 2030 was set for each state based on its potential to achieve reductions using three 'building blocks” identified by EPA:

' Make fossil fuel power plants more efficient.

' Substitute increased generation from existing lower-emitting natural gas combined cycle plants.

' Substitute increased generation from zero-emitting renewable power sources.

States generally have flexibility to meet the established targets how they see fit and can incorporate measures that reduce CO2 other than the identified building blocks.

What's Alliant Energy's initial reaction?

The Clean Power Plan final rule is 1,560 pages and is technically different from the proposed rule issued in June 2014. However, the goal to reduce carbon from power plants remains. Currently, we are carefully reviewing and evaluating how this affects our company and our customers. The EPA's goals align with our long-term plan to continue the transition to increased use of reliable, clean energy at a pace that keeps electricity affordable for customers.

We understand this is just the first step in what may be a long process that includes legal challenges and the development of compliance plans. As we work with our state regulators to develop strategies to comply, we will continue to take the approach of doing what is best for our customers to ensure reliability and minimize the cost impact on our customers. We are fortunate to operate in states that have a long history of energy-efficiency programs, environmental stewardship and support for renewable energy.

What are the legal challenges?

A number of states other than Iowa have requested the courts to require EPA to press the pause button on implementing the Clean Power Plan pending any litigation outcomes.

It is anticipated that the states will then ask the courts to grant an injunction ordering the EPA to stop. In addition to the injunction request, substantive legal challenges to the rule are expected and will not be completed for a number of years.

What's Alliant Energy's overall approach?

Our approach reflects actions we've taken since 2005 to reduce CO2 by over 15 percent. It includes the retirement of, or converting to natural gas, several older smaller and less efficient electric generating units. It also includes installing emissions controls and improving the efficiency of our newest and largest generating units. We continue to grow our renewable generation and currently own and operate four wind farms with a total capacity of 568 MW. All of these actions will support compliance with EPA's final rule along with ensuring safe, reliable energy while minimizing costs for customers.

' Doug Kopp is president of Alliant Energy's Iowa utility. Comments: (800) 255-4286.