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CPS Energy carbon reductions should help state plan
By Tracy Idell Hamilton on July 1, 2014
States have been given the latitude to develop their own plans to reduce carbon emissions by 30 percent by 2030 per the Environmental Protection Agency’s proposed new regulations, but it will likely take years until such plans are crafted and approved, CEO Doyle Beneby told the utility’s Board of Trustees Monday afternoon.
Texas could shoulder as much as 25 percent of the prescribed reduction, he said — and CPS Energy, by diversifying the utility’s power plant fleet, is in a good position to help the state meet the new federal rules.
“We just need to make sure CPS Energy gets credit for the work it’s done and will continue to do,” Beneby said.
Since 2010, CPS Energy has added lower and no carbon sources of power to its fleet — natural gas, wind and solar — with the goal of generating 65 percent of its electricity from low carbon-intense resources.
The utility also chose to retire the JT Deely coal units 15 years ahead of schedule, switched to ultra low sulfur coal and added robust demand reduction and energy efficiency programs for customers.
Such diversification continues to reduce CPS Energy’s exposure to regulatory, environmental, technology and fuel risks, Raiford Smith, CPS Energy’s new vice president of corporate development and planning, told the board.
The carbon intensity of CPS Energy’s fleet has dropped 12 percent from 2005, the year the EPA will begin counting carbon emissions. By 2020, after the closure of the two Deely coal units, the utility’s carbon intensity is on track to decline a total of 45 percent from 2005.
CPS Energy didn’t bet on a single winner, Smith told the board, such as going all in on natural gas, for example. And that will likely be the utility’s continued path for future carbon reductions, he said.
He shared the many potential moves CPS Energy might make to further reduce its carbon output, from high reduction/high cost/high risk options such as increased nuclear power or investing in carbon capture and storage, to lower impact/lower cost options such as boosting efficiency at current plants and incentivizing more energy efficiency measures for customers.
“Each strategy has a trade-off,” he said. “It’s all about hedging against risks.”