Independent grid operators, elected officials and public utility commissioners have all raised concerns about the potential for power outages if states are forced to comply with the Environmental Protection Agency’s costly and overreaching Clean Power Plan.
Thus far, and not surprisingly, EPA has turned a deaf ear. They do, after all, have a habit of listening only to those whose opinions with which they are comfortable.
At the request of congressional leaders, the Federal Energy Regulatory Commission—the agency charged with protecting the reliability of our nation’s energy generation and supply system—will host a series of technical conferences weighing the impact of compliance with EPA’s proposal on the electric grid. The conferences kick off today in Washington, D.C.
You would think, as EPA’s Clean Power Plan is more akin to a national energy policy (the job of Congress) than it is to a plan to protect public health (EPA’s actual job), that FERC would be heavily involved with the planning and crafting of the proposal. Not so, according to FERC Commissioner Tony Clark. In a letter to the House Energy and Commerce Committee, Clark wrote, “With regard to FERC staff generally, I believe it unreasonable to conclude that FERC meaningfully or substantially participated in the [Clean Power] plan’s development.”
EPA has shown little regard for reliability concerns in the past and likely fears that FERC’s direct involvement may interfere with the agency’s knack for employing fuzzy math to underestimate the impacts of its regulations.
While finalizing the Mercury Air and Toxic Standards, EPA claimed that MATS (along with the Cross-State Air Pollution Rule, which was later remanded back to EPA) would cause 9,500 megawatts of coal unit retirements. In contrast, utilities have announced the retirement of 389 coal units—more than 61,000 MW and almost 20 percent of the U.S. coal fleet—as a result of EPA policies. 50,000 MW can be directly attributed to MATS. You read that right. EPA’s projection for coal retirements due to MATS/CSAPR was only 1/5th the number of actual retirements caused by MATS.
During last year’s “polar vortex,” major utility companies like American Electric Power had to run 89 percent of its soon-to-be-retired coal capacity just to meet demand and avoid cascading power outages. Shortly thereafter, FERC Commissioner Philip Moeller issued a wake-up call before the Senate Committee on Energy and Natural Resources, stating, “I was, and remain concerned that EPA’s analysis greatly underestimated the amount of power production that would be retired due to these rules.” Moeller continued, “The experience of this winter strongly suggests that parts of the nation’s bulk power system are in a more precarious situation than I had feared in the past.”
According to EPA’s own projections, the Clean Power Plan will cause significantly more coal retirements than what the agency projected for MATS. An analysis conducted by NERA Economic Consulting projected that at least 45,000 MW more would be forced to retire. That is greater than the entire electricity supply of New England.
It’s no wonder that in Kansas last week, FERC Commissioner Clark, a former legislator and utility regulator in North Dakota, said complying with EPA’s mandate is a “huge decision to make,” and “a little bit like the Affordable Care Act…play ball, and potentially get caught up in it in a way that you may regret later on.”
We’ve already seen the impact of EPA’s regulations on our supply of reliable electricity. Will EPA listen to the experts this time around?