Vectren 2013 Annual Report Download - page 49

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Climate Change
Legislative Actions & Other Climate Change Initiatives
In April 2007, the US Supreme Court determined that greenhouse gases (GHG's) meet the definition of "air pollutant" under the
Clean Air Act and ordered the EPA to determine whether GHG emissions from motor vehicles cause or contribute to air pollution
that may reasonably be anticipated to endanger public health or welfare. In April 2009, the EPA published its proposed
endangerment finding for public comment. The proposed endangerment finding concludes that carbon emissions from mobile
sources pose an endangerment to public health and the environment. The endangerment finding was finalized in December
2009, and is the first step toward the EPA regulating carbon emissions through the existing Clean Air Act in the absence of
specific carbon legislation from Congress.
The EPA has promulgated two GHG regulations that apply to the Company’s generating facilities. In 2009, the EPA finalized a
mandatory GHG emissions registry which requires the reporting of emissions. The EPA has also finalized a revision to the
Prevention of Significant Deterioration (PSD) and Title V permitting rules which would require facilities that emit 75,000 tons or
more of GHG's a year to obtain a PSD permit for new construction or a significant modification of an existing facility. The EPA's
PSD and Title V permitting rules for GHG's were upheld by the US Court of Appeals for the District of Columbia. In 2012, the
EPA proposed New Source Performance Standards (NSPS) for GHG's for new electric generating facilities under the Clean Air
Act Section 111(b). On October 15, 2013, the US Supreme Court agreed to review a focused appeal on the issue of whether
the GHG rule applicable to mobile sources triggered PSD permitting for all stationary sources such as Vectren's power plants. A
decision is expected in 2014.
In July 2013, the President announced a Climate Action Plan, which calls on the EPA to re-propose and finalize the new source
rule expeditiously, and by June 2014 propose, and by June 2015 finalize, NSPS standards for GHG's for existing electric
generating units which would apply to Vectren's power plants. States must have their implementation plans to the EPA no later
than June 2016. The President's Climate Action Plan did not provide any detail as to actual emission targets or compliance
requirements. The Company anticipates that these initial standards will focus on power plant efficiency and other coal fleet
carbon intensity reduction measures. The Company believes that such additional costs, if necessary, should be recoverable
under Indiana Senate Bill 251 referenced above.
Numerous competing federal legislative proposals have also been introduced in recent years that involve carbon, energy
efficiency, and renewable energy. Comprehensive energy legislation at the federal level continues to be debated, but there has
been little progress to date. The progression of regional initiatives throughout the United States has also slowed.
Vectren is committed to responsible environmental stewardship and conservation efforts and if a national climate change policy
is implemented believes it should have the following elements:
• An inclusive scope that involves all sectors of the economy and sources of greenhouse gases, and recognizes early
actions and investments made to mitigate greenhouse gas emissions;
• Provisions for enhanced use of renewable energy sources as a supplement to base load coal generation including
effective energy conservation, demand side management, and generation efficiency measures;
• Inclusion of incentives for investment in advanced clean coal technology and support for research and development;
and
• A strategy supporting alternative energy technologies and biofuels and continued increase in the domestic supply of
natural gas to reduce dependence on foreign oil.
The Company emits greenhouse gases (GHG) primarily from its fossil fuel electric generation plants. The Company uses the
methodology described in the Acid Rain Program (under Title IV of the Clean Air Act) to calculate its level of direct CO2
emissions from its fossil fuel electric generating plants. Based on data made available through the Electronic Greenhouse Gas
Reporting Tool (e-GRRT) maintained by the EPA, the Company’s direct CO2 emissions from its fossil fuel electric generation that
report under the Acid Rain Program were less than one half of one percent of all emissions in the United States from similar
sources. Emissions from other Company operations, including those from its natural gas distribution operations and the
greenhouse gas emissions the Company is required to report on behalf of its end use customers, are similarly available through
the EPA’s e-GRRT.