Policy and Regulatory Developments for 2012
In 2012, the U.S Environmental Protection Agency (EPA) and state environmental regulators continued to develop a broad set of environmental rules covering climate, air quality, water quality and coal ash issues. EPA and the Obama Administration have indicated that development of additional, rigorous environmental regulations on power plants is likely to continue. These regulatory efforts will require owners of many U.S. power plants to install new environmental controls on their existing plants.
At the same time, continued low natural gas prices due to the development of unconventional natural gas resources have provided utilities with more cost-effective, low-emission generation options. Many utilities are considering retiring some of their aging coal plants and replacing them with gas-fueled generation rather than retrofitting them; the United States is likely to see up to 20 percent of its coal fleet retire by 2020.
Political, regulatory and legislative developments in 2012 include:
- Just as in 2011, no major federal environmental or climate legislation passed during 2012.
- In March 2012, EPA finalized the Mercury and Air Toxics Standards (MATS), regulating hazardous air pollutants such as mercury, metals and acid gases on most coal plants. The MATS rule requires utilities to install new emission controls on many coal-fired plants, which must comply by 2015 or in some circumstances, 2016. Many utilities have cited the MATS rule as the primary reason that they are retiring or retrofitting expensive controls across their coal fleet.
- In August 2012, a federal court in Washington, D.C., vacated and remanded the Cross State Air Pollution Rule (CSAPR). Because of CSAPR’s potential impact on our Texas and New Mexico customers, we strongly opposed the rule and were pleased with the court's decision. The U.S. Environmental Protection Agency (EPA) has appealed the decision to the U.S. Supreme Court.
- The Clean Air Act’s visibility program may require power plant emission reductions to reduce haze in national parks and wilderness areas. In 2012, U.S. Environmental Protection Agency (EPA) approved “Regional Haze” state implementation plans for Colorado (where EPA relied on Xcel Energy’s Clean Air-Clean Jobs Act project) and Minnesota (where the state required NOx and SO2 emission reductions from our Sherco plant). Several environmental groups have sued EPA in Minnesota, alleging that the agency should require additional NOx emission reductions from our Sherco plant to improve visibility in national parks and wilderness areas of northern Minnesota.
- EPA has announced plans to revise downward the ambient air quality standard for ground-level ozone. Over the next several years, this new standard could put more pressure on power plants and other sources to reduce NOx emissions. EPA has further plans for regulations to address water effluent, cooling water intake management and coal combustion by-products disposal.
- EPA is already regulating greenhouse gases from major new power plants and is considering a potential new program covering most existing fossil generating plants. In his inaugural address, President Obama vowed to address climate change during his second term.
About the Report
We published our first corporate responsibility report (formerly known as the Triple Bottom Line report) in April 2005, with the contents covering the 2004 calendar year, and we have published a similar report in each following year. Our report is based on Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines, the most widely used sustainability reporting framework in the world. Additionally, we incorporate the GRI’s Electric Utilities Sector Supplement indicators wherever possible.