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Calpine will support new CO2 rules Texas is challenging in court

Splitting from many of its rivals in the power generation business, Houston-based Calpine Corp. will file court papers Thursday in support of the Obama administration’s new rules on power plant emissions, which Texas and other states have challenged in federal court.

Calpine stands to benefit from the administration’s Clean Power Plan because the proposed regulatory regimen overwhelmingly affects coal-fired power plants, and Calpine operates mostly natural gas-fired generators with lower carbon dioxide emissions.

Company officials previously have voiced support for the plan, which has drawn heavy criticism from coal interests.

CEO Thad Hill told the Houston Chronicle in an interview Wednesday that Calpine will intervene on behalf of the U.S. Environmental Protection Agency, a defendant in the lawsuit by Texas and 23 other states. A handful of other power companies will join Calpine’s intervention in the case and any related lawsuits, Calpine confirmed.

Texas and West Virginia are leading the lawsuit, which was filed Oct. 23.

Texas Attorney General Ken Paxton contends the proposal is an illegal federal overreach that will increase electricity costs for consumers.

The Clean Power Plan would require every state to cut carbon emissions at existing plants by 30 percent from 2005 levels by 2030. States have leeway on how to implement their individual plans.

Hill said Calpine wants to be part of the debate on how Texas and other states will comply with the rules if their lawsuit isn’t successful.

“The state is going to do what the state feels they need to do, and we just want to make sure there’s a plan B conversation happening,” Hill said.

He said coal plants already are struggling with existing federal regulations, incentives for wind and solar power, and the U.S. shale production boom that has lowered the price of natural gas and made it more competitive with coal.

Read full article at Fuel Fix