Testifying before the Pennsylvania House and Senate Coal Caucuses on Tuesday, PCA CEO John Pippy said the state’s coal industry was viewed as a “leader” in reclamation efforts, addressing environmental impacts from the crude mining practices of generations past.

Addressing the Caucuses during a public hearing on the Environmental Protection Agency’s controversial “Clean Power Plan”, Pippy said that since the inception of a per-ton tax, Pennsylvania coal operators alone have paid almost $US600 million ($A777 million) into a federally administered fund which is returned to the states under a statutorily-designed formula.

The total dollar amount Pennsylvania has received from the fund within this time span exceeds $1.1 billion.

He said the EPA had “taken advantage” of the cyclical market conditions created by the influx of cheap natural gas and a decrease in electric demand to introduce the “harshest regulation on the coal industry to date”

“While the price of natural gas is sure to fluctuate and the demand for electricity to rise as the economy strengthens, the EPA’s proposed Clean Power Plan will be the cheap shot that cripples the industry from rebounding when the demand market returns,” Pippy said.

His comments were backed up by the Pennsylvania Public Utility Commission’s submitted comments of opposition, which stated: “The EPA has not given sufficient consideration to the impacts its proposal will have on organised electricity markets and the challenges that the proposal presents to system reliability and the economy.”

At the May 2015 DEP Quarterly meeting, PUC commissioner Robert Powelson presented that this rule, as proposed will have significant impacts on grid reliability, wholesale markets, retail electric prices and regional generation composition.

Under the proposed plan, Pennsylvania’s average interim emission rate goal (2020-2029) is 1,179 lbs/MWH and its final emission goal is 1,052 lbs/MWH. To achieve the final goal, Pennsylvania would have to reduce carbon emissions by 32% over 2012 levels.

Pippy said the EPA’s proposed rule would prematurely transfer utilities away from coal to less reliable sources of electricity.

“The EPA is blatantly circumventing state’s rights by mandating energy policies disguised as environmental regulation,” Pippy said.

According to the PUC, this conflicts with the Federal Energy Regulatory Commission’s responsibility under the Federal Power Act to regulate wholesale electricity markets.

“The proposed rule has been peddled as flexible and achievable, but as made clear by comments of opposition submitted by the industry, utilities and grid operators nationwide, the interim steps for an achievable and realistic regulation have been overstepped,” Pippy said.

The rule calls for a 30% reduction of carbon emissions by 2030 and gives states one year to determine the path to achieve this goal.

Pippy said coal-fired power plants had already decreased other emissions from coal, by 85% per electric unit – meeting and exceeding previous EPA regulated air quality emissions mandated by the National Ambient Air Quality Standards.

He said this proved that government and industry could work together effectively to set realistic goals so the industry could continue to evolve and meet targets.

Instead, Pippy said the “extremity” of the EPA’s proposed rule had caused uncertainty within the coal industry; “and investors are hesitant to invest funds in research and development for carbon technology”.

“As a result, the lack of available technology makes achieving the current greenhouse gas regulations impossible in the timeframe mandated,” he added.

The Pennsylvania Department of Environmental Protection has projected that, based on EPA’s four building blocks, coal use by Pennsylvania’s coal fleet will decrease by 68%.

Sweeping consequences

The impacts of the EPA’s proposed rule, however, would go far beyond coal.

Pippy said it would also hit those communities which host coal-fired power plants, those employed at said facilities, all energy-intensive industries and every ratepayer who depends on “reliable provisioning of electricity” at competitive rates.

Even beyond this, grid operators, utilities and state regulators are worried about the reliability of the electric grid under the EPA’s proposal, given the rule’s focus to shift the sources of the current generation mix to “more volatile and intermittent” fuels.

“While the EPA claims that alternate sources such as natural gas and nuclear will be able to meet demand, the actual grid operators, utilities and public utility commissions nationwide have publicly opposed the rule citing lack of infrastructure and a source that can supply the same baseload electricity that coal provides,” Pippy said.