Legislators mull emission allowances for Clean Power Plan

Although the nationwide plan may never be fully implemented, legislators are taking a longer look at a better-safe-than-sorry approach when it comes to carbon emission allowances in Minnesota.

HF2817, sponsored by Rep. Jim Newberger (R-Becker), proposes guidelines to implement The Clean Power Plan, also known as rule 111(d) under the federal Clean Air Act. The plan proposes to reduce carbon monoxide emissions by capping the amount each state can produce through existing power plants. Under the plan, “emission allowances” would be granted to the state through the Environmental Protection Agency, then allocated to both operating energy facilities, and their host cities.

Rep. Jim Newberger

The House Job Growth and Energy Affordability Policy and Finance Committee tabled the bill Wednesday for possible inclusion in another bill. A companion, SF2972, sponsored by Sen. David Tomassoni (DFL-Chisholm), awaits action by the Senate Environment and Energy Committee.

The bill would require 10 percent of any emission allowances not allocated to coal-fired electric generating power plants be set aside for host cities in which coal-fired plants have ceased operation prior to the expiration of its operating license. One percent of that amount would go directly toward aid for displaced workers.

A commission would determine if implementation of the Clean Power Plan, commonly known as “cap-and-trade,” was a significant factor contributing to the operation ceasing, based on its remaining life expectancy and other financial considerations. Allowance distribution would be calculated based on carbon emission for the specific plant compared to total emissions from the state. It would apply to any coal-fired plant that ceased operation after 2009, and expire 20 years after allowances from the plan begin.

“In my opinion there’s a race to shutdown coal plants,” Newberger said. “This would have a dramatic effect on the communities that have coal-based power plants. I’m trying to lay a foundation so these workers and communities don’t get thrown under the bus.”

“[Loss of energy jobs] would directly impact the city, schools and local employers,” Becker Mayor Jerome Kleis said. “Please take into consideration the region will need assistance.”

In February the U.S. Supreme Court ordered a hold on the national implementation of the Clean Power Plan until a full judicial review could check all legal challenges. As a result, the scope and value of potential emission allowances cannot be determined until after that time.

Rep. Pat Garofalo (R-Farmington) likened the “cap-and-trade” allowance system to pallets full of, currently fictional, money.

“We don’t know if they will exist,” Garofalo said, “But we want to have a plan in place if they do; all of this is a lot of uncertainty until we find out who the next president is going to be.”

Opponents of the bill, including some committee members and the Minnesota Pollution Control Agency, expressed concerns over whether the bill prematurely limits the state’s flexibility implementing the plan, should federal courts uphold the regulation.

“I don’t support the cap-and-trade system,” Newberger said. “But if we are dealt this hand, then we want to make sure to save one card for the community who got the plug pulled on them.”