OUCC Statement on New EPA MATS Rule

For Immediate Release
December 21, 2011

Indiana Utility Consumer Counselor David Stippler made the following statement this afternoon, following the U.S. Environmental Protection Agency’s (EPA’s) announcement of its final Mercury and Air Toxics Standards (MATS) rule.

"Today’s announcement in Washington is short on guarantees or assurances about the rule’s impact on consumer rates and electric reliability," said Stippler, noting that the Indiana Office of Utility Consumer Counselor (OUCC) will need to carefully review the full rule in the coming days. "Some of today’s signs from the EPA are encouraging – including the promise of consulting with regional transmission operators, state public utility commissions, and other independent stakeholders on reliability issues.

"Also, it appears that the new rule will expand the EPA’s proposed three-year implementation timetable by encouraging state environmental regulators to make an additional year ‘broadly available for technology installations,’" continued Stippler. "However, I am concerned about what happens after that fourth year, and whether electric utilities will still be able to comply with the new rule in the most reliable and cost-effective manner possible."

Stippler wrote to EPA Administrator Lisa Jackson earlier this month, urging a more reasoned approach than the three-year timetable the EPA had proposed. The two independent regional transmission organizations (RTOs) that coordinate power flows in Indiana and neighboring states recently raised concerns about the proposed three-year timetable and its potential effects on electric safety and reliability.

Stippler also cited new cost figures provided at the Indiana Office of Utility Consumer Counselor’s (OUCC's) request this month. Aggregated figures from the Indiana Energy Association show that it may cost Indiana's five large investor-owned electric utilities a total of up to $11.5 billion in capital expenditures to comply with 4 new EPA mandates, including MATS. These are costs that would ultimately be borne by ratepayers, and translate to an overall rate increase of approximately 22 percent over the long term (when compared to the combined 2010 operating revenues of those utilities).

"I remain very concerned about the costs of the new MATS rule and other new EPA rules and the cumulative effect they will have on consumers during difficult economic times," added Stippler. "If utilities are forced to rush to comply, costs will increase unnecessarily. We will have to watch vigilantly to ensure that today’s promises of flexibility will materialize."

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The Indiana Office of Utility Consumer Counselor (OUCC) represents Indiana consumer interests before state and federal bodies that regulate utilities, including the Indiana Utility Regulatory Commission (IURC) and the Federal Energy Regulatory Commission (FERC). As a state agency, the OUCC’s mission is to represent all Indiana consumers to ensure quality, reliable utility services at the most reasonable prices possible through dedicated advocacy, consumer education, and creative problem solving. To learn more, visit www.IN.gov/OUCC.