In an article by Texas Monthly, Jackson Walker partner Mike Nasi discusses the potential impact of the Clean Power Plan (CPP) on electricity markets across the state of Texas. Mike describes how the inflexibility of carbon limits under the rule would cause a hike in the price of coal-fired electricity, in addition to causing repayment problems for utility companies that took on debt to build coal-fired plants.
The article was written and released in anticipation of today’s Executive Order by President Trump to begin the process of rolling back the CPP and other greenhouse gas regulations.
“Even if I had no problem with the legality of the CPP, the policy embraced by it is flawed as a matter of the electric power markets,” Mike told Texas Monthly. “It was in no way accurately calculating the cost of a market that would work this way, and did not factor in the hard reality of how a state needs to run a grid.”
"It was in no way accurately calculating the cost of a market that would work this way, and did not factor in the hard reality of how a state needs to run a grid."
Mike, who represents San Miguel Electric Cooperative, Inc., South Texas Electric Cooperative, Inc., and the Gulf Coast Lignite Coalition, also highlights the “irreparable” damage the CPP could cause with its mandate to prematurely retire coal-fired plants. Because electricity co-operatives throughout the state took out hefty federal loans to fund construction of coal-fired plants in the 1970s and 1980s – a time where the federal government effectively mandated the construction of coal-fired power plants over other types of power plants – shutting them down could cause hundreds of millions of dollars in stranded debt. Mike adds that several legal observers suggest that this is why the Supreme Court issued a stay of the regulations.
For more information, read “The Uncertain Fate of the Clean Power Plan and the Future of Electricity in Texas.”
For over 24 years, Michael J. Nasi has practiced environmental and energy law before state and federal agencies and appellate courts. He provides clients with compliance counseling, permitting and enforcement defense work related to the Clean Air Act, Clean Water Act, Solid Waste Disposal Act, Endangered Species Act, and National Environmental Policy Act. He also represents parties in ongoing EPA regulatory proceedings and appeals related to carbon dioxide, interstate air quality, regional haze, and coal combustion residuals before the United States Courts of Appeals for the Fifth, Eighth, Tenth, and D.C. Circuits, as well as the Supreme Court of the United States.