Dive Brief:
- Officials at the Jacksonville Electric Authority (JEA), the Florida city’s municipal utility, have caled the proposed EPA emissions reduction plan “the most disruptive energy policy proposal in modern times” because it is likely to shift utilities toward over-reliance on natural gas and impose excessive costs on electricity customers.
- By forcing utilities to meet “crazy, unnecessary and unattainable" interim 2020 goals and the long term target of a 30% emissions reduction by 2030, officials said the EPA regulations will impose a compliance cost on JEA of $1 billion or more that will be passed to customers.
- JEA officials also warned the EPA regulation will put small municipal utilities at a serious disadvantage against larger investor-owned utilities (IOU) like Florida Power and Light (FP&L) because the munis have limited generation assets that may end up as stranded costs while IOUs like FP&L have been financing a shift to natural gas for some time.
Dive Insight:
EA’s $630 million investment in its coal-burning Northside Generating Station epitomizes the threat municipal utilities face of being “entrapped” with stranded assets. With the benefit of a $72 million grant from the Department of Energy, the plant was retrofitted in 2002 to increase output by 250% and cut pollution by 10%. But it may now have to be shuttered ahead of schedule to meet EPA requirements.
JEA warned that lawsuits may prove the EPA Clean Power Plan to be illegal and the November election may limit the agency’s ability to enact it. JEA also warned that Florida’s natural gas pipeline system may not be able to expand fast enough to meet demand and could be vulnerable to hurricanes.
