By nearly any measure, Cooperative Energy’s R.D. Morrow Sr. Generating Station is a picture of reliability.

Repowered from a 1978 coal plant, the state-of-the-art, 550-megawatt natural gas unit was relaunched in March 2023, providing baseload capacity when needed in a power market that serves 45 million people. It can also restart in less than six hours to back up the region’s intermittent renewable resources.

On top of that, it’s helped Cooperative Energy reduce its total carbon footprint by about 42%, or 2 million tons of CO2 per year.

“Being able to do all those things is actually bolstering grid reliability,” says Jeff C. Bowman, president and CEO of the generation and transmission co-op based in Hattiesburg, Mississippi. “We’re much more reliable and we’re helping our neighbors with renewable resources as well in a much more effective way than we ever could have when we were burning coal at Plant Morrow.”

But Morrow’s success story is in danger of an untimely end.

On May 11, 2023, the U.S. Environmental Protection Agency proposed a rule to eliminate carbon dioxide from the power sector by 2035. To reach that goal, it relies on fossil-fuel generation plants either shutting down completely or adopting clean hydrogen co-firing or carbon capture and storage (CCS), both technologies that have not been adequately demonstrated. EPA plans to finalize the rule in April.

“We’d be shutting down the most efficient unit that we have,” Bowman says. “It would cause our rates to go up and our reliability to be decreased.”

‘Reliability matters’

It’s a dilemma that’s playing out at utilities across the country, as G&Ts and their member co-ops prepare for the impact the EPA proposal would have on millions of households, businesses, schools, hospitals and other consumers.

As demand for electricity increases and policies continue to force the premature retirement of always-available generation, NRECA and its members are leading a high-profile effort to raise the alarm about this industry-wide threat to reliability and affordability and urging EPA to withdraw its proposal.

“It’s our job to speak out and tell the truth about the threat not just to electric co-ops but to the entire country,” says NRECA CEO Jim Matheson. “Reliability really is at risk. Our country is on track to fall short of the electricity we need to meet future demand.”

That message has been taken by NRECA and co-op officials to the EPA, Capitol Hill, the Federal Energy Regulatory Commission, key policymakers and local and national media outlets.

“The consequences of this proposed rule are severe,” Matheson says. “It would result in less reliable electricity at far greater costs just when demand is rocketing in our digital economy. We’ve got to stop shutting down plants that still have useful life. Reliability matters.”

NERC’s take

The North American Electric Reliability Corp.—the not-for-profit regulatory authority charged with protecting the reliability and security of the grid—is also helping make the case.

In its 2023 Reliability Risk Priorities Report, NERC listed “energy policy” as the No. 1 threat to reliability. Its 2023 Summer Reliability Assessment also noted that reliability is no longer assured and that environmental policy choices are creating significant challenges. And its 2023-’24 Winter Reliability Assessment again calls out looming challenges as electricity demand soars.

“We’re working closely with our government partners to help them understand the impacts of EPA regulations,” says Howard Gugel, NERC’s vice president of compliance assurance and registration.

He says the agency’s disorderly, accelerated push to retire reliable baseload in favor of renewables “requires extraordinary action” by the grid’s stewards.

Hydrogen and CCS

The EPA proposal gives fossil-fuel plants two options—beyond shutting down completely—for reducing CO2 emission: co-firing with hydrogen (30% blend by 2032; 96% hydrogen by 2038) or CCS. But co-ops argue that both have enormous costs and logistical challenges and neither has been proven effective under real-world conditions.

For Cooperative Energy, Bowman says co-firing would require the siting and construction of a regional hydrogen pipeline and other infrastructure for the Morrow plant, a costly and time-consuming endeavor. He also cautions that burning hydrogen in a gas turbine would require cost-prohibitive modifications to the unit’s combustion system and has not been adequately tested at-scale to determine operational and structural impacts.

The carbon capture option also would require modifications and a new pipeline to carry CO2 to a location with suitable underground geology to store gas.

“The availability of equipment for compliance is only speculative at this point and at a cost that cannot be calculated due to all the unknowns,” Bowman says. “It’s unproven technology.”

CCS recently received a body blow when developers sidelined two major CO2 pipelines cited by EPA as evidence of the necessary infrastructure being in place for compliance. In fall of 2023, a series of permitting challenges and public opposition forced Navigator CO2 Ventures to cancel its 1,302-mile pipeline and Summit Carbon Solutions to postpone its 2,067-mile pipeline until 2026.

“Together, these setbacks for the development of CO2 pipelines undermine EPA’s already spurious projections for the readiness of CCS as an adequately demonstrated and achievable technology,” says Dan Bosch, NRECA regulatory affairs director. “They also confirm the concerns NRECA asserted in its comments to EPA on Aug. 8, that planned pipeline projects do not equate to infrastructure that can be relied on to meet this mandate in EPA’s unworkable compliance timeframe.”

Straight talk

“Not salvageable.”

That’s how Tony Campbell, president and CEO of East Kentucky Power Cooperative, characterized the EPA rule to FERC at its technical conference on reliability late last year.

His appearance was one of several by co-op leaders to bring on-the-ground perspectives about the EPA proposal to federal hearings and events during 2023.

“The proposed rule exceeds EPA’s authority under the Clean Air Act, hinges on widespread adoption of technologies that have not been adequately demonstrated to work at commercial scale while achieving EPA’s requirements and contains unrealistic and unachievable time frames,” Campbell told the commissioners. “The only way that the proposed rule will not have a detrimental effect on electric reliability is for EPA to withdraw it.”

Patrick O’Loughlin, president and CEO of Buckeye Power Inc. and Ohio Rural Electric Cooperatives, brought similar concerns about the rule before a congressional panel last summer.

“It will jeopardize nearly every coal-fired power plant by 2039 and most by 2030” and cost several billion dollars to replace coal generation without guaranteed reliability, he said.

Buckeye Power has invested over $1 billion in environmental controls at its coal-based 1,800-MW Cardinal Power Plant. Replacing just one 600-MW unit with photovoltaics would require 6,000 acres to set more than 1,500 MW of solar panels at a cost of at least $1.5 billion.

“That is to replace just the energy output and not the other reliability services our coal units provide,” he says.

Co-op innovation

Matheson is quick to note that electric cooperatives aren’t just about saying “no” to the ongoing national energy transition.

“Co-ops are open to innovation,” he says. “We like the idea and respond to it when given incentives that make sense for our local circumstance.”

Over the past decade, co-ops have added thousands of MWs of renewable sources to their portfolios, invested in energy storage, nuclear technology and hydropower and have made some of the industry’s first forays into CCS.

But Matheson says co-ops’ innovative spirit is no match for a rushed, top-down approach like the EPA plan.

“When it comes to policy, given a mandate like this EPA rule, and it’s forced on everybody … that’s where we take a different approach,” he says. “It doesn’t reflect the autonomy and local decision making of each of our members.”

He said the goal of co-ops in this fight is to continue to remind regulators in Washington that their actions have real consequences for real people.

“This proposed rule will result in higher costs and greater uncertainty for Americans and magnify today’s reliability challenges with grave consequences for an already stressed electric grid,” Matheson says. “To avoid catastrophe, policymakers must recognize their role in threatening the reliability of the grid and take steps to help prevent more rolling blackouts before it’s too late.”