Federal utility regulators plan to raise questions later this month that could push the debate over the administration’s climate rules to a fever pitch.
The Federal Energy Regulatory Commission (FERC) this week listed the questions it seeks to answer at a March 31 technical conference in St. Louis, Mo., to assess the impacts of EPA’s proposed climate rules on utilities in the Central United States. Specifically, the commission will be asking how plans to take coal production offline will impact customers who rely on that energy.
The March 31 meeting will be the commission’s fourth and final conference on the compliance challenges posed by the Clean Power Plan, which seeks to limit carbon output from existing power plants. The meeting will include industry experts, state regulators, and others with a stake in the Midwest power market.
Compared to previous meeting notices, this one underscores a key industry concern: How the climate rules, along with previously enacted pollution standards, could create a situation in which areas served by midwestern power plants experience rolling power outages.
Industry sources said ahead of the first technical conferences last month that they feared the commission would not address how previous air toxics rules, which go into effect in April, would combine with the proposed climate regs. Power producers have long warned that heavy regulation would ultimately lead to reduced output.
On the other hand, environmentalists have expressed concern that FERC would pay too much attention to how closing coal plants will affect Americans who rely on the energy they produce. They say the commission should focus on helping states comply with the rules rather than focusing on potential negative consequences — which they consider overstated.
Many coal utilities have announced thousands of megawatts of power-plant retirements, slated to begin in the spring. Republicans and some Democratic lawmakers have raised this concern when addressing the negative consequences of moving forward with EPA’s climate agenda.
FERC wants to know what happens if concerns about losing reliable energy sources mean the coal plants can’t be retired on schedule.
“Given the possibility that a large amount of coal-fired generation in the Central region could be retired as a result of both [EPA’s] Mercury and Air Toxics Standards and the Clean Power Plan, what issues may arise if many of these units are required to stay online as Reliability Must Run units or System Support Resources?” the March 3 FERC agenda reads.
The agenda continues: “If transmission upgrades must be built to allow Reliability Must Run units or System Support Resources to retire, how will that affect the timing of compliance with the Clean Power Plan?”
Reliability issues came up during two recent meetings, held in Washington, D.C., and Colorado. But the coal plant retirement question was not posed so directly by FERC itself ahead of either meeting. A third meeting, slated for March 11 in D.C., focuses primarily on market fixes needed for compliance.
The commission has tried to tamp down discussions that would “validate” one set of issues over another, such as the utility sector’s fears over being able to keep the lights on and the environmentalists’ climate change advocacy.
FERC Chairman Cheryl LaFleur has said she wants the commission to be an “honest broker” in these meetings, not to play up one side of the debate over the other.
But Republican Commissioner Philip Moeller continues to press concerns over the effects of other pollution standards, already in place, that would hurt states’ ability to comply with the Clean Power Plan while potentially harming reliability.
The commission is comprised of five members, generally with two spots held by each party and the White House holding sway over the chairmanship.
Moeller at the Denver meeting raised the impacts of EPA’s national air quality rules on climate compliance. He said existing air quality rules to control ozone levels impose restrictions on industry, making it nearly impossible for Arizona and other Western states to build new gas plants to comply with the proposed Clean Power Plan.
