In an effort to reduce greenhouse gas emissions, We Energies built an efficient coal plant in Oak Creek and converted others to burn natural gas. Credit: Mike De Sisti

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In meeting federal requirements to cut power plant emissions linked to global warming, Wisconsin's task was made much tougher by the closing last year of the Kewaunee nuclear power plant.

When the Kewaunee plant was shuttered in May 2013, Wisconsin lost roughly 5% of its power supply. But more importantly, the state lost an even bigger share of the power generation sources that produce no greenhouse gas emissions.

In crafting the Obama administration's proposal to slash greenhouse gas emissions from power plants, the U.S. Environmental Protection Agency made a priority of keeping nuclear power plants running among its clean energy goals.

When it set state-by-state targets to reduce emissions, the EPA started from 2012, a year that saw rock-bottom natural gas prices, less burning of coal and reduced greenhouse gas emissions across the country.

In 2013, however, greenhouse gas emissions from Wisconsin power plants rose to more than 50 million tons, their highest level in eight years, according to EPA statistics.

The shutdown of the nuclear plant in Kewaunee, southeast of Green Bay, prompted utilities to turn to fossil fuels. And as natural gas prices climbed last year, utilities burned more coal, utility and energy observers say.

The closure of the reactor has had "a definite impact on emissions from the state's electricity sector," said Paul Meier, an energy computer modeling expert at the University of Wisconsin-Madison's Wisconsin Energy Institute.

The carbon dioxide emissions reductions the state achieved from building wind farms over the past eight years have largely been offset by the fossil fuels used to replace the power generated by Kewaunee, he estimates.

"Prior to its closure, the facility provided about one-quarter of Wisconsin's non-CO2-emitting power," he said.

In laying out how states could pursue emission reduction strategies, the EPA stressed flexibility, Meier said. The agency also set a less difficult target to reach for those states that rely most heavily on coal. Wisconsin's goal was the 15th most lenient in the country, he said.

Among the EPA's proposed alternatives were increasing contributions from energy efficiency, renewables, natural gas and nuclear, as well as efficiency improvements at coal plants. In a preliminary analysis of the technical documents produced by the EPA, Meier said the agency gauged Wisconsin's potential contributions from each of these alternatives.

The inclusion of nuclear power among those alternatives raises an obvious question, Meier said. And that's whether reopening the Kewaunee plant is one of the alternatives Wisconsin should pursue.

EPA officials aren't counting on Kewaunee reopening, but said they discussed the shutdown of the Wisconsin nuclear power plant to emphasize the opportunity that would be lost if other such plants were closed. The agency has identified more than 6% of the nuclear power capacity in the country as "at risk of retirement."

Among those at risk are several nuclear plants in Illinois operated by Exelon Corp., which could be important low-carbon power sources to retain if Midwest states combine forces on a regional strategy to reduce carbon dioxide emissions.

Executives at Dominion Resources Corp. were emphatic in 2012, and again last year, when they said their decision to close the Kewaunee reactor was final. The decision won't be reversed even if global warming regulations raise the price of fossil fuels and make nuclear power more competitive again, they said.

Dominion spokesman Mark Kanz said last week the company isn't budging. He noted the company surrendered its license to operate the plant more than a year ago, after Kewaunee stopped generating electricity.

Response to EPA

Meanwhile, utilities, environmental groups and state agencies are reacting to the EPA proposal by providing comments before the agency issues a final rule next year.

Nathan Conrad, a spokesman for the state Public Service Commission, said the agency is working with the state Department of Natural Resources and other groups as it prepares to submit comments on the rule.

"At this point, it is too early to tell exactly how the state will meet these new standards and what will be their effect on ratepayers with respect to cost and reliability," he said.

As part of that outreach, the PSC is asking utilities, customer groups and others what role the state's energy efficiency program, Focus on Energy, should play in helping reduce carbon emissions.

Business groups concerned about the costs to implement the policy, including the U.S. Chamber of Commerce and its Madison-based affiliate, Wisconsin Manufacturers & Commerce, have raised questions about whether the rules will hold up in the courts. A U.S. Supreme Court decision is expected this month in the U.S. Chamber's suit challenging the EPA over its plan, which effectively bars construction of new coal plants in the U.S.

As stakeholders begin the process of evaluating options for Wisconsin to meet the clean energy target, more renewable energy and a bigger investment in energy efficiency are on the table.

The primary choice utilities will propose will be to replace older coal-fired power plants with plants that burn natural gas, said Mark Thimke, a Milwaukee energy lawyer. Natural gas plants release about half the emissions of coal plants.

There will be a national debate over the feasibility and cost to comply with the rules, he said. Emissions saved by the utility sector could be offset by emission increases from the trend of manufacturers producing more domestically rather than importing products, he said.

'Ripe for renewal'

The EPA is projecting Wisconsin to double its renewable power generation by 2030, and to increase its investment in Focus on Energy to produce more energy savings.

Last week, state regulators said Wisconsin utilities have met the 2015 renewable energy target, two years ahead of schedule. That means 10% of the state's electricity came from wind turbines, biomass power, hydroelectric dams and solar energy last year.

That achievement illustrates why the renewable target is "ripe for renewal," said Keith Reopelle, senior policy director at Clean Wisconsin, a conservation group. Some utilities have exceeded their renewable energy targets, and every utility is on track to comply with the renewable mandate the Legislature passed in 2006, he said.

Utilities, meanwhile, want the EPA to make sure they get credit for steps they've already taken to reduce greenhouse gas emissions, as well as efforts underway to add cleaner energy sources.

"In Wisconsin, we have great energy efficiency programs. We want to make sure that's counted," Patricia Kampling, chairwoman of Madison-based Alliant Energy Corp., told WISN.com. "We already have great renewable programs in place, and we want to make sure that gets counted."

The framework outlined by the EPA "is definitely ambitious but we believe it has enough flexibility that we can work with our states to make sure we have an implementation plan that's achievable and also cost-effective for our customers," she said.

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