Posts filed under Reliability

Will EPA Ignore FERC Again?

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.

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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?

 


Regulators, Legislators and Energy Industry Experts Agree: EPA’s Carbon Plan is Unworkable

Public service and utility commissioners from across the country are in Washington, D.C. this week to attend the National Association of Regulatory Utility Commissioners Winter Meeting. Without question, the Environmental Protection Agency’s Clean Power Plan will be a central topic of discussion as its chief proponent, Administrator McCarthy, will be on hand to tout her usual misleading claims.

Ms. McCarthy’s audience at NARUC, however, may not be inclined to swallow her claims of lower energy bills and a stable grid, hook, line and sinker as her Clean Power Plan is being met with growing concern and criticism. Legislators, regulators and energy industry leaders alike are pointing out major flaws in EPA’s proposal. Today, we’re taking a look at what experts are saying about three core tenets of the CPP: reliability impacts, cost increases and unrealistic assumptions.

Regardless of what Ms. McCarthy may say, here are two facts she can’t escape:

  1. EPA’s plan jeopardizes the reliability of our electric grid.
  1. EPA failed to consult the Federal Energy Regulatory Commission, the federal regulatory body in charge of monitoring America’s electric grid.

Don’t take my word for it though – let’s hear directly from the experts:

“SPP’s transmission system impact evaluation indicates serious, detrimental impacts on the reliable operation of the bulk electric system in the SPP region, introducing the very real possibility of rolling blackouts or cascading outages that will have significant impacts on human health, public safety and economic activity within the region.” – Southwest Power Pool

“The weather events experienced this [2014] winter provided an early warning about serious issues with electric supply and reliability. This country did not just dodge a bullet – we dodged a cannonball.” – Nick Akins, AEP

“I believe it unreasonable to conclude that FERC meaningfully or substantially participated in the [Clean Power Plan’s] development.” – Tony Clark, FERC Commissioner

Here’s another inescapable fact: The CPP will result in significant electricity price increases across the board.

“We must realize that utility rates are not within the jurisdiction of EPA.” – Lisa Edgar, NARUC President and Florida Public Service Commissioner

“Plant retirements are higher than projected. Electricity prices are rising. Even factors beyond our control – such as last winter’s [2014] weather – are on a collision course with the shutdowns caused in part by new federal regulations.” – Senator Lisa Murkowski (R-AK)

And, yet another: EPA has created a flawed and unworkable rule based on unrealistic assumptions.

EPA has set mandatory emissions reductions “with no analysis by EPA as to whether that actually makes sense or is economically reasonable for each state.” – Robert J. Martineau, Tennessee Department of Environment and Conservation Commissioner

“NCDENR believes EPA’s proposed rule … is legally and technically flawed… In defining a specific rate for each state and then mandating each state meet that predetermined rate, EPA runs counter to the U.S. Constitution.” – John E. Skvarla, North Carolina Department of Environment and Natural Resources Secretary

“The proposal assumes that Arizona can completely be off coal in 2020. The fact is that it gets hot in Arizona and there are periods in the summer in which we are utilizing every possible source of electricity, from natural gas to nuclear and coal.” – Henry Darwin, Arizona Department of Environmental Quality Director

To learn more about the impacts of EPA’s regulations, visit KeepAmericasPowerOn.org today and get the facts.

 


Lights Out: New Video Shows How EPA Will Leave American Families in the Dark

America’s Power released a new video today highlighting the serious threat the Environmental Protection Agency’s regulations pose to our electric reliability. The video follows a family’s journey through a winter storm to learn why power outages have occurred at a time when reliable electricity is needed the most. What they discover is that coal-based power plants, which provide our base-load electricity and keep our homes and businesses powered during winter storms and throughout the year, have been forced offline due to EPA’s misguided and politicized energy policies.

The latest addition to our #ColdInTheDark campaign, this video drives home a crucial point – EPA’s overreaching and dangerous regulations will indeed turn the lights off on American families if left unchallenged.

EPA is clearly living in a fantasy world where they believe intermittent energy sources can make up for the nearly 49,000 MW of generating capacity from coal plants set to be shut down by the end of this year. Even though EPA prefers to dwell in dreamland, we hope our video wakes Americans up to the harsh reality these regulations will impose.

What can you do to help prevent Americans from going without power when they need it most? Sign up for the America’s Power Army, and learn more at KeepAmericasPowerOn.org.

 


Newly Launched #ColdInTheDark Campaign Highlights Reliability Concerns with EPA Regulations

This week, America’s Power launched a new campaign—#ColdInTheDark—to highlight the high costs and significant electric reliability impacts that will result from the Environmental Protection Agency’s proposed carbon regulations. The initiative offers a glimpse into the reality American consumers will face under the Clean Power Plan: less affordable and less reliable electricity, especially during times of critical demand.

EPA’s regulations are forcing coal-based power plants to shut down, threatening our supply of reliable electricity and elevating the risk of power outages for years to come. Last winter’s polar vortex revealed an already-strained electric grid, and major grid operators, regulators, elected officials, energy experts and other concerned Americans from coast to coast have sounded the alarm.

#ColdInTheDark is the inaugural installment of KeepAmericasPowerOn.org, a new initiative that will include several themed campaigns throughout 2015. The site will serve as an online hub that includes news articles, expert takes, infographics, social media share graphics, and resources related to electric grid reliability.

It’s time to expose EPA’s regulations for what they are, before Americans are left #ColdInTheDark – without the low-cost, dependable power we need, when we need it the most. Visit www.KeepAmericasPowerOn.org to learn more.  


Protecting Our Electricity Grid

Last week, I penned a response to National Journal’s “Energy Insiders” on the important topic of securing America’s electricity grid. While we certainly must protect our grid from cyber and physical attacks, we must also be concerned about another critical threat to the grid: power outages and electricity shortages due to reliability.

FERC Commissioner Philip Moeller has been vocal recently about these impending energy shortages. At a U.S. Energy Association meeting last week, he warned that the grid will likely stay reliable during mild weather, assuming we don’t experience periods of extreme hot or cold, but this is “not a sound basis of planning,” to hope the thermometer doesn’t tip either direction. This is an important point that should not be lost and something I discussed in my National Journal response.

Here is what I wrote:

 

Grid security has become a hot topic in Washington. Unfortunately, the discussion has focused on just one aspect—cyber security—of a much broader issue. Indeed, there is another security threat to our electric grid that has been downplayed by this administration; a threat that, ironically, has a common-sense and achievable solution.

This past winter brought historically cold temperatures to many parts of the country that resulted in widespread concerns with electric grid reliability. These concerns were well founded as we saw firsthand what happens when politically driven, costly regulations are imposed on coal-based industries that exclude the use of coal from our energy portfolio.

As natural gas price spikes and infrastructure and transport concerns strained the grid, prompting fears of blackouts and brownouts, it is not surprising that utilities turned to coal to ensure the power stayed on. In fact, AEP was running nearly 90 percent of its coal plants currently slated for closure just to help meet demand for power during the coldest days.

EPA Administrator Gina McCarthy claims that coal will “play a critical role in a diverse U.S. energy mix for years to come” and also alleges her agency is focused on protecting electric reliability. A recent study from ACCCE, however, projects that 25 to 40 percent of the nation’s coal fleet could be shuttered depending on the stringency of EPA’s forthcoming 111(d) proposal, costing consumers $13 billion to $17 billion per year in higher electricity and natural gas prices.

Administrator McCarthy and others in this administration have so far only offered misleading statements about reliability concerns, maintaining that EPA’s regulations will not impact coal usage and that the agency will work to protect and preserve reliability.

We know these claims to be untrue, as EPA greenhouse gas regulations will impose a de facto ban on new coal-fueled power plants and likely force retirements of existing plants across the country which will, in fact, cause serious reliability issues that still haven’t been addressed by this administration.

Last week, the Senate Committee on Energy and Natural Resources hosted a hearing on grid reliability, but no representative from the Environmental Protection Agency (EPA) testified about these very real reliability concerns associated with the agency’s regulatory assault on coal.

Some members of the committee, like Senators Manchin and Murkowski, raised concerns about how EPA regulations play into the broader grid security issue. Unfortunately, it seems that this administration is doing all it can to quell such concerns and continue leading America toward an energy policy that wholly disregards cost and reliability consequences.

Diminished electric reliability is certainly a threat to our well-being, to our economy and to our national security. It makes America less competitive, and it puts us all in harms’ way. In order to make headway on protecting grid security, we must have a more comprehensive and candid dialogue about all the looming threats.


Protecting Grid Reliability Now, So We Don’t Regret it Later

Last week, the Senate Committee on Energy and Natural Resources held a hearing on electric grid reliability concerns—something that was definitely necessary after a series of Wall Street Journal articles came out highlighting the vulnerability of the grid if there were to be a coordinated attack in conjunction with internal analysis from the Federal Energy Regulatory Commission (FERC). While those that normally contribute to the discussion of grid reliability were well represented, it was notable that EPA was absent from the hearing.

This winter was one of the coldest we’ve had in a while, and the changing temperatures all but gave us whiplash. Thanks to coal-based electricity, however, none of us truly suffered the bite of Old Man Winter as the power stayed on. The same may not be true this summer when coal-fueled plants that were running at full capacity this winter come off line due to EPA regulations. In fact, we could all be in for a rude awakening when rolling brownouts and blackouts begin this summer due to an overreliance on one fuel source that is just not capable of meeting demand in real time.

In terms of generating electricity, coal-based power has some general advantages over natural gas that are magnified under conditions like the polar vortex. Natural gas is a “just-in-time fuel”, piped in as power plants use it – so pipeline disruptions due to a drop in temperature or spike in demand impact generation in real time. Coal, on the other hand, is stock-piled at the plant and generally not subject to such disruptions. Further, the price of coal has remained historically steady, whereas the price of natural gas has been much more volatile. Moving forward, we can expect that the price of natural gas will continue to rise much more rapidly than the price of coal. EIA projects that real natural gas prices for electric power generation will increase three times more than coal over the next 20 years.

Since American Electric Power (AEP) ran about 90% of its coal plants that are set to retire in 2015 to help meet demand through the coldest days of winter, it makes you wonder why people want to eliminate the most reliable form of electricity. Further, it begs the question as to why EPA isn’t front and center at a hearing on reliability when its regulations will be responsible for all but ensuring an unreliable grid and higher electricity costs for all.

There’s still time for you to tell EPA that you want a reliable source of affordable electricity. Visit www.EPAregscostjobs.com today and make your voice heard.

 


Leaders Convene to Discuss Future of Energy at ECO:nomics

This week, the Wall Street Journal hosted its ECO:nomics business forum in sunny Santa Barbara, California. Several CEOs and business leaders gathered together to discuss America’s energy and environmental future. How do we meet our ever-growing electricity needs, while also reducing emissions? Many leaders agreed: coal is here to stay, and we must utilize clean coal technology.

Nick Akins, CEO of American Electric Power, reiterated the importance of coal-fueled power to support our electrical grid. Utilities like AEP depend on coal, a reality that was evident during the recent ‘polar vortexes’ and throughout the frigid winter. Around 90% of AEP’s coal plants currently slated for closure was brought online to help meet demand and power through the coldest days. As Akins told ECO:nomics attendees, we need coal backing up our electricity grid because “no one likes the lights to go out.”

Akins was followed by Peabody Energy Corp. CEO Gregory Boyce. Boyce and Akins carried a similar message: coal is critical and will be an integral part of our energy mix for years to come. It is the largest source of electricity generation in the U.S. and the fastest-growing source around the world. Boyce noted that Germany, Italy, Spain and the UK are all increasing their imports of coal, and Asia has been steadily increasing its use of coal, as well.

Coal-fueled power is electrifying communities across the globe and can bring power to all those who need it most, Boyce explained. Given Boyce’s commentary at the conference, it’s not surprising that Peabody is leading a global effort to help promote coal’s role in eradicating poverty through its newly launched Advanced Energy for Life campaign.

Both Boyce and Akins stressed the importance of further developing clean coal technology. In the words of Nick Akins, “progress is being made but not enough.” Boyce pointed out that building new clean coal plants is an opportunity to decarbonize. They both agreed that coal must be a major part of our future energy portfolio to ensure reliability, while also limiting emissions with advanced technology. But, if EPA continues with its crusade against coal-based electricity, the future of clean coal technology will be effectively quashed.

Instead we should support advanced technologies and maintain low-cost, reliable power for our communities through the use of America’s most abundant source of energy – coal.


Another Polar Vortex Highlights the Problems with Over-Reliance on Natural Gas

Milder spring temperatures may be on the horizon, but not before another cold snap sweeps the nation. This winter, we’ve seen what can happen when a polar vortex strikes: consumers are asked to cut back on electricity, our power grids are stretched to the limit and natural gas prices skyrocket. Extreme temperatures have highlighted the problems associated with an over-reliance on any one fuel source, like natural gas, for baseload electricity.

Underscoring these problems, the Washington Post reported this morning that homeowners can expect to see particularly steep natural gas bills this winter. The article reports that a typical gas consumer may see a bill of $388, a 17 percent rate increase from just a year ago.

Despite these recent, real-world examples, the president and his EPA remain unfazed and are proceeding as planned to all but ensure that America doesn’t have the affordable, reliable energy it needs to keep the lights on and businesses running.  Of course, American consumers will ultimately foot the bill for the president’s politically driven—and very costly—energy policy. And, based on recent data, we now know that low- and middle-income families are most vulnerable to increased energy costs, which often force them to choose between keeping their heat on and putting food on their tables.

The simple fact is that coal remains the most reliable, affordable energy source in America. Coal can be stored on-site and held in reserve, unlike natural gas, which is a “just-in-time” fuel that is piped in when needed and is susceptible to roller coaster prices. Using less coal, and instead relying too heavily on resources like natural gas, solar, wind and renewables, could undermine the reliability of our electric grid and threaten volatile price swings and overall higher bills for ratepayers.

It’s encouraging to see that our elected officials on Capitol Hill and in statehouses across the country are recognizing the dire consequences of this administration’s rulemaking—and taking action to stop it. The House Energy & Commerce Subcommittee on Energy and Power will hold a hearing this Thursday, February 27, to discuss American energy successes, as well as electric reliability and grid issues. The hearing is very timely, since temperatures across the country are expected to drop later this week—reinforcing the sobering lessons from this winter’s cold snap.

We’ll be live tweeting from the hearing, so be sure to tune in on Twitter for updates throughout the morning. And while you’re at it, sign our petition and tell EPA that coal must continue to be a part of America’s energy future.