The electric industry warned of power shortages if the nation’s top grid regulator doesn’t take a more active role in ensuring that new power plant regulations don’t take too much power off the system.
Those assembled Thursday at the Federal Energy Regulatory Commission said a proposed Environmental Protection Agency rule to limit carbon emissions from power plants — called the “Clean Power Plan” — could cause brownouts and power failures as states, utilities and other operators overhaul the electric grid to comply with the regulation.
“I think it’s fair to say that the Clean Power Plan is the most fundamental transformation of our bulk power system that we’ve ever undertaken,” said Gerard Anderson, president of Michigan utility DTE Energy, who represented trade group Edison Electric Institute.
Industry groups, congressional Republicans and conservative commissioners fear that the carbon rule, which aims to slash electricity emissions nationwide 30 percent below 2005 levels by 2030, will cause major disruptions in electricity supply. The rule, due for finalization in mid-summer, is the centerpiece of President Obama’s climate change agenda.
The EPA, with its Democratic and environmental supporters, says those concerns are overblown, as were industry concerns about supply during an earlier rule to limit mercury and other toxic emissions from old, dirty coal- and oil-fired generators.
“The [carbon emissions] proposal provides room for planning to avoid reliability concerns,” EPA Air and Radiation Administrator Janet McCabe said at the conference.
The proposed rule calls for states to reduce emissions through improving power-plant efficiency, shifting from coal- to natural gas-fired power, expanding renewable power and boosting consumer energy efficiency. McCabe said there’s room for improvements beyond those four “building blocks,” such as better managing wastewater used to cool power plants and improving the efficiency of transmission lines used to carry bulk loads of electricity to utilities.
But Commissioner Philip Moeller, a Republican, said the proposal will lean heavily on increasing natural gas supply and renewable energy, noting that many state utility commissioners and electric generators have criticized EPA’s assumptions about customers and power plants improving efficiency.
Relying on natural gas — by far the most significant portion of the options EPA identified for reducing emissions — is logistically difficult, said Lisa Edgar, president of the National Association of Regulatory Utility Commissioners. That’s because there’s a shortage of pipelines, and ramping up quickly to comply with the rule would be daunting.
“Many states have questions about infrastructure and whether we have pipeline capacity needed to increase natural gas,” said Edgar, who is also a member of the Florida Public Service Commission.
Gerry Cauley, president of the North American Electric Reliability Council, said natural gas and renewable energy supplies are strained in various areas.
“There are currently shortages we’re projecting in some regions of the country,” Cauley said.
Increasing renewable electricity runs into a similar problem as natural gas, Moeller noted, as financing and coordinating big transmission projects designed to get massive amounts of new renewable power onto the grid has been tricky.
On top of that, planning for renewable additions has been hard because not enough modeling has been done, said John Moore, a supporter of the EPA proposal and senior attorney of the Natural Resources Defense Council’s Sustainable FERC Project. But still, Moore maintained there’s plenty of flexibility within the proposal and power markets to ensure reliability.
“It’s critical to get the planning and especially the modeling right,” Moore said.
The commission needs to take a broad view of planning being done within states or regions to prevent development of a “mosaic of plans that don’t really fit well,” Cauley said.
Some environmental regulations are also getting in the way of siting and planning more natural gas pipelines and transmission lines for renewable electricity needed to meet the power-plant rule’s goals, said Alexandra Dunn, executive director of the Environmental Council of States, whose members are state environmental agency officials.
“A lot of policies … are in conflict with dramatically increasing infrastructure quickly,” Dunn said, adding that to comply with the Clean Power Plan “a lot of the background noise that exists around environmental regulation is going to have to move.”
The idea of prodding the EPA to include a mechanism called a “reliability safety valve” as an emergency stopgap to fill supply shortages gained steam at the conference, though the form and legal force of that tool was cloudy.
“For the lawyers in the room, we think there’s some creative ways to address that,” said Craig Glazer, vice president of federal government policy with PJM Interconnection, which oversees grid reliability across the Mid-Atlantic and Appalachia.
The issue is whether states and utilities would be allowed to violate the power plant rule to maintain reliability regulations set by other agencies, such as the North American Electric Reliability Council, the industry-supported agency the commission designated with overseeing reliability under the 2005 Energy Policy Act.
“If they say they are painted into a corner and are going to violate [North American Electric Reliability Council] standards…. that is an urgent call for somebody to make a decision,” Cauley said. “That relationship needs to be worked out beforehand with the Department of Energy and the EPA.”
