EPA Coal Cuts Light Up Washington

A meeting at the U.S. Federal Energy Regulatory Commission’s (FERC’s) Washington headquarters Thursday lived up to expectations that it would be one of the most exciting sessions in the agency’s history.  Buttoned up policy wonks, lobbyists, and power market experts showed up in droves—over 600 registered—to witness a discussion of what President Obama’s coal-cutting Clean Power Plan presaged for the U.S. power grid.  The beltway crowd was joined by activists for and against fossil fuels—and extra security.
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EPA’s top air pollution official, Janet McCabe, defended her agency’s record and its respect for the grid.  “Over EPA’s long history developing Clean Air Act standards, the agency has consistently treated electric system reliability as absolutely critical.  In more than 40 years, at no time has compliance with the Clean Air Act resulted in reliability problems,” said McCabe. 

McCabe assured FERC that EPA had carefully crafted its plan to provide flexibility to states and utilities regarding how they cut emissions from coal-fired power generation, and how quickly they contribute to the rule’s overall goal of lowering power sector emissions by 30 percent by 2030 from 2005 levels.  (Michigan has state-verified energy conservation and renewable energy options to comply with EPA’s plans according to the Natural Resources Defense Council.)

McCabe said EPA is considering additional flexibility before it finalizes the rule, as early as June.  EPA would consider, for example, specific proposals for a “reliability safety valve” to allow a coal plant to run longer than anticipated if delays in critical replacement projects—say, a natural gas pipeline or a transmission line delivering distant wind power—threatened grid security. 
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Criticism was leveled at NERC in a report issued last week by the Brattle Group, an energy analytics firm based in Boston. Brattle found that compliance with EPA’s plan was “unlikely to materially affect reliability.” 

Brattle’s report concurred with renewables advocates who have argued that NERC got it wrong by focusing too much on the loss of coal-fired generation and too little on that which would replace it:  “The changes required to comply with the CPP will not occur in a vacuum—rather, they will be met with careful consideration and a measured response by market regulators, operators, and participants.  We find that in its review NERC fails to adequately account for the extent to which the potential reliability issues it raises are already being addressed or can be addressed through planning and operations processes as well as through technical advancements.”

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