FERC Pulled Into House GOP’s Questions About EPA Carbon Rule
Posted at 2:03 p.m. on July 28, 2014
Republican concerns about the potential closure of coal power plants — and questions about the nation’s electricity infrastructure — will be on display Tuesday as a House Energy and Commerce subcommittee hears from the Federal Energy Regulatory Commission on the EPA’s proposal to regulate carbon emissions from existing power plants.
Energy and Commerce Chairman Fred Upton of Michigan and other GOP members have raised concerns that the proposal, which the administration calls the Clean Power Plan, would result in the closure of coal power plants and jeopardize grid reliability.
They also have questioned whether EPA consulted FERC, which is responsible for grid reliability.
“FERC has closely followed the development of the Clean Power Plan because it is clear that such regulations and related state compliance plans could have implications for the operation of the grid,” FERC Chairwoman Cheryl LaFleur wrote in her prepared testimony.
In her response to questions from the committee, LaFleur outlined the input FERC had in the development of the proposal:
- On February 7, 2014, I and others from FERC met with EPA officials at FERC headquarters. At the meeting, the EPA officials described in very general terms aspects of the Proposal.
- On February 18, 2014, FERC staff met with EPA staff at EPA headquarters in Washington, DC, as a follow-up to learn more about the Proposal.
- On March 6, 2014, FERC staff met at EPA headquarters with staff from EPA and DOE to discuss certain concepts proposed in a paper by RTOs related to the Proposal.
- On April 16, 2014, FERC staff met with EPA staff at EPA headquarters in Washington, DC, to review parts of a draft of the Proposal and to ask about certain issues and information in the Proposal.
- On April 23, 2014, FERC staff participated in a telephone conference with staff from the EPA and the Office of Management and Budget (OMB) regarding a draft of the Proposal. FERC staff provided oral comments on the draft Proposal, which focused primarily on reliability. FERC staff commented on the draft’s contemplated increases in the capacity factor for natural gas combined cycle units, renewable generation, and coal heat rates. In particular, FERC staff commented on pipeline and other infrastructure adequacy given the potential increased utilization of natural gas combined cycle units and renewable generation in the draft Proposal. FERC staff also commented on the advisability of regional collaboration among states and some form of a “reliability safety valve.”
- On May 29, 2014, FERC staff met with staff from EPA at EPA headquarters in Washington, DC. EPA staff provided FERC staff with an oral summary of the draft Proposal.
- On July 18, 2014, FERC staff met with EPA staff at EPA headquarters in Washington, DC. The EPA staff provided FERC staff with an oral update on the public response to the Proposal.
“FERC has not specifically analyzed the proposal to determine the impact it could have on generating unit retirements or potential impacts on fuel diversity,” LaFleur wrote, noting that the regulations provide flexibility for developing a compliance strategy to be phased in starting in 2020. “Retirement of a unit is an economic decision for the unit’s owner, unless a unit is required or requested to remain in service (with appropriate compensation) to ensure reliability.”
LaFleur resisted the committee’s pressing for a FERC study on the effects of the regulations, which have yet to be finalized and will depend on state implementation plans.
“Given the uncertainty and substantial number of assumptions, the results from any study would depend greatly on the assumptions chosen as inputs,” she wrote. “Thus, a study could be more speculative than informative, especially for later years.”