Their view: Air pollution rule would hamper energy services

Over the New Year’s holiday, Xcel Energy officials learned the U.S. Court of Appeals, D.C. Circuit, had delayed implementation of the Cross-State Air Pollution Rule. Xcel spokesman Wes Reeves issued this statement reflecting the company position on the court ruling:

On Dec. 30, the U.S. Court of Appeals, D.C. Circuit issued a stay of the Jan. 1 implementation of a new U.S. Environmental Protection Agency (EPA) emissions rule known as the Cross-State Air Pollution Rule (CSAPR).

CSAPR gave power generators in 27 states less than six months to dramatically lower emissions of sulfur dioxide and nitrogen oxides, which regulators say are drifting to eastern cities.

Xcel Energy is a national leader in clean energy investment. Prior to the CSAPR rule, plans had been made for investments in emission control technologies for our Texas-based coal-fired power plants. However, we opposed CSAPR because it left little time to make those investments before Jan. 1, and the company’s only viable compliance option would have raised electricity costs in Texas by 7 percent on average. This compliance option called for reducing operation of Texas-based coal-fired power plants and depending on older, more expensive natural gas-fired plants. Moreover, this option would have imposed unprecedented strain on the Xcel Energy generating system, and we were concerned that it could have harmed the reliability of our electricity service.

Last October, Xcel Energy joined Texas and other states and utilities in filing suit against EPA to block the rule. We are pleased with the court’s ruling that stays implementation until the court has a chance to review the merits of the case. This is expected to take place sometime in 2012.

This delay means that, at least until the court acts on the merits of the case, we can continue to operate our Texas coal-fired plants as base-load units rather than depend primarily on higher-cost natural gas generation.

We are reviewing the anticipated effect on our Texas customers, and will update the fuel cost filing made in November at the Public Utility Commission of Texas accordingly.