INDIANAPOLIS | Indiana will contest the legality of the final Clean Power Plan rule, announced Monday by Democratic President Barack Obama, which requires states to significantly cut power plant emissions, starting in 2022, to improve public health and minimize the impact of climate change.
Republican Gov. Mike Pence said too much is at stake for Hoosier jobs and the state's economy for Indiana to do anything less than unleash a full-scale legal challenge to the rule in federal court.
"Here in Indiana, homeowners and businesses rely on coal-burning power plants for low-cost, reliable energy," Pence said. "Indiana has called time and again for these ill-conceived rules to be withdrawn, and I informed the administration that unless the final rule was demonstrably and significantly improved, Indiana would not comply."
Under the plan, Indiana must reduce its power plant carbon dioxide emissions from the 2012 level of 2,021 pounds per megawatt to 1,451 pounds by 2022 and 1,242 pounds by 2030.
The U.S. Environmental Protection Agency said it set Indiana's standard near the maximum 2030 emissions level of 1,305 pounds in recognition of the state's current dependence on coal-fired power plants.
Pence said that's not good enough.
The rule permits each state to reach its new carbon limit however it decides is best, be it replacing coal-fired power plants with natural gas, investing in renewable energy sources, such as solar or wind, or improving energy efficiency and thereby reducing power usage.
NIPSCO has been closely tracking the EPA's rule in draft form, and the final rule is significantly different than previous draft rules, company spokesman Nick Meyer said.
"NIPSCO is working to determine the actual impact on customers," he said.
NIPSCO and some other Indiana utilities have historically used coal because it is a low-cost, abundant, reliable source of fuel, Meyer said. However, NIPSCO has diversified its fuel mix and cut carbon emissions outside of the rule, he said.
The company reduced its greenhouse gas emissions by 18 percent since 2005, he said. That reduction outpaces the national average of 10 percent during the same time period, he said.
Nationwide, Obama said the goal is for carbon emissions in 2030 to be 32 percent less than 2005 levels.
The president said reaching that goal will help create tens of thousands of new energy jobs, avoid up to 3,600 premature deaths, lead to 90,000 fewer asthma attacks in children, prevent 300,000 missed work and school days, and save consumers a total of $155 billion in energy charges from 2020 to 2030.
Obama described the mandate as "the single most important step" America has ever taken to fight climate change and warned that without fast action climate change may become impossible to reverse, leaving populations unable to adapt.
Power plants account for roughly one-third of all U.S. emissions of the heat-trapping gases blamed for global climate change, making them the largest single source. Temperatures in 2014 were the planet's warmest on record, according to the White House.
Climate disruption also is wreaking havoc this year on Indiana. Purdue University estimates Hoosier farmers could lose up to $500 million in corn and soybean crops due to record-breaking rains in June and July.
Steve Francis, chairman of the state's Sierra Club chapter, said the governor should not fight the Clean Power Plan but embrace it, and provide Hoosiers the benefits of homegrown clean energy and energy efficiency.
"Today is a victory for Hoosiers who want clean air to breathe and affordable clean energy to power our homes and businesses," Francis said. "The Clean Power Plan is a historic step towards cleaner air and water, healthier families and communities, and more clean energy jobs here in Indiana and across the country."
On the other hand, the new rule may doom Indiana's strong manufacturing sector and overall economy, which relies on low-cost energy to produce products for the world, said Barbara Quandt, state director of the National Federation of Independent Business.
"Operating expenses will increase as the cost of electricity rises, and customers will have less money to spend on Main Street," she said. "It's a recipe for fewer jobs and slower growth."
Indiana and 14 other states sued the Obama administration in 2014 seeking to halt final adoption of the Clean Power Rule. That case was dismissed two months ago by a federal appellate court that deemed the legal challenge premature.
Attorney General Greg Zoeller, a Republican, said the states will ask the appellate court to reopen that case now that the final rule has been adopted and the U.S. Supreme Court on June 29 struck down a similarly expansive EPA mandate.
"We are mindful of environmental concerns, but when EPA oversteps its legal authority, states including Indiana have an obligation to challenge EPA’s actions to allow court review and seek to halt the economically harmful regulations from taking effect," Zoeller said.