Obama rule adds ‘safety valve’ for grid emergencies

By Peter Behr, Rod Kuckro | 08/04/2015 09:01 AM EDT

Faced with warnings of possible grid blackouts tied to future coal plant closings, U.S. EPA added a reliability “safety valve” to its final Clean Power Plan that gives states a 90-day period to exceed carbon limits during emergencies.

Faced with warnings of possible grid blackouts tied to future coal plant closings, U.S. EPA added a reliability "safety valve" to its final Clean Power Plan that gives states a 90-day period to exceed carbon limits during emergencies.

U.S. EPA air chief Janet McCabe said, however, that her agency expects that regulatory relief for reliability purposes will be a rarity.

The final carbon rule rolled out during a ceremony in the East Room of the White House yesterday builds in periods of time during which power plant emissions can be averaged and exceptions made to carbon emissions limits. Electric grid reliability had been a major point of contention during the months of buildup toward a final rule. The issue pulled the Federal Energy Regulatory Commission into a highly charged debate about what happens when environmental policy to combat global warming forces the closure of dozens of baseload coal plants and reconfigures the electricity system.


McCabe said grid operators and regulators have options if another extreme weather event like the polar vortex of 2013 and 2014 happens again. Short-term needs for coal- and gas-fired plants to run harder can be "smoothed out over these long averaging times," she said. The safety valve is "a place to go in a truly unexpected situation."

The rule would require states to justify the need for the a safety valve exception and get signoff from the grid operator or coordinator in their region. "While the initial 90-day period is in use, the emissions of the affected [generators] that exceed their obligation will not be counted against the state’s overall goal or emission performance rate," the rule states.

But if conditions require a plant to continue operating under the safety valve provisions beyond 90 days — for example, if a nuclear plant were forced out of commission for a lengthy period — a state would have to revise its compliance plan to make up for the excess carbon emissions.

McCabe noted that electric reliability concerns are also addressed by the extra time in the final rule for states to prepare compliance strategies and to start cutting emission in 2022.

FERC Commissioner Tony Clark, a Republican critic of the EPA plan, posted a lengthy, pointed statement on his home page to "outline the difficult path that now lies ahead."

He expressed concern that even the extra two years to begin compliance might not be enough to build "major infrastructure projects necessitated by this regulation."

Achieving EPA’s goals under the rule will not be "easy or inexpensive," said Clark, who continued to be a thorn in the administration’s side this year as EPA sought to quell accusations that it hadn’t reached out to FERC enough for a clearer picture of grid reliability issues.

"Such is the stuff of unicorns and leprechauns," he wrote. "For if EPA’s energy vision was the most reliable and affordable means of providing power, we would not need the rule. Engineering experts, markets, utilities and their regulators would already be choosing these resources without EPA dictates. No amount of political posturing changes that fact."

‘Much work lies ahead’

On the other hand, FERC Chairman Norman Bay praised EPA for its efforts to address reliability concerns "by adding time and flexibility for compliance, adopting a reliability safety valve, and requiring state plans to be reviewed for reliability."

"Much work lies ahead," said Bay as he released a "coordination document" reached among FERC, EPA and the Energy Department pledging to work together on the implementation of the Clean Power Plan.

"The three agencies will meet frequently, no less than quarterly, to discuss what they are learning about the developing state plans and any potential reliability concerns," the document said.

"Where potential reliability issues of concern are identified with elements of a developing plan from a state or group of states," said the document, "EPA, DOE, and FERC will meet to determine an approach to resolving the issues, which may include meeting with the state or states that are developing the plan along with the relevant planning authorities and/or reliability coordinators."

Others charged with overseeing the nation’s electric grid reserved judgment yesterday, promising further analysis to gauge the rule’s effect on reliability.

PJM Interconnection, the nation’s largest grid operator, plans to analyze the final rule "for potential impacts to the power grid."

The Midcontinent Independent System Operator is launching its stakeholder process to "fully assess its impact," it said in a statement.

"MISO is in the process of developing analysis of both a regional and state-by-state view of the total impact of the rule, including electric and gas infrastructure," the grid operator said. "We will work now on modeling the final rule and run the analysis to help stakeholders better understand compliance options."

The North American Electric Reliability Corp., the federally appointed reliability monitor for the interstate high-voltage grid, warned in comments to the original EPA proposal for a 2020 start date that the timeline "does not provide enough time to develop sufficient resource to ensure continued reliable operation of the grid by 2020." That timetable, it said, increased the potential for "wide-scale, uncontrolled outages."

In a statement yesterday, NERC said it "appreciates that the Environmental Protection Agency’s final Clean Power Plan rule reflects changes identified in NERC’s two special reliability assessments released earlier this year. While we continue to review the details, initial reports indicate that the final rule addresses several topics identified as needing attention by the NERC reports and many stakeholders," the organization said.

"NERC’s principal finding recommended additional time in order to allow for extensive planning and significant investments in new energy infrastructure that will be needed to achieve emission reduction goals," it added.

NERC expects to issue an updated reliability assessment in the second quarter next year.

Jürgen Weiss, lead author of a rebuttal study by the Brattle Group in February, said that NERC overlooked or underestimated the carbon-reduction strategies that are available to reduce the impact of coal-plants closing. "We think NERC has not taken into consideration a number of factors that would substantially mitigate NERC’s concerns," Weiss said (EnergyWire, Feb. 12).

EPA’s final plan takes issue with NERC’s reliability warning, adopting the Brattle Group’s analysis. "The EPA appreciates NERC’s attention to, and interest in, the proposed rule. However, we note that like some other studies, NERC assumes considerably less flexibility than actually is provided to states and [electric generating units] in this final rule. The final rule provides states with considerable time and latitude in designing plans that are tailored to the system in which their EGUs operate, which should be reflected in any reliability analysis."

"The NERC study does not fully reflect the current electric grid," EPA said. For example, the agency noted that the amount of renewable energy generation that NERC assumes for 2020 is about the same as what’s being produced today. "Projections for 2020 are considerably higher."

EPA’s expectation of a large step-up in wind production is not dependent upon congressional action to reinstate a production tax credit for wind energy, McCabe said yesterday. Rather, it adopts the newest forecasts of comparative costs of wind energy and competing sources, she said.

However, the American Wind Energy Association continues to stress that the tax credit is vital to the industry’s growth. New wind energy installations fell 92 percent in 2013 after the tax credit expired. It was eventually renewed for a single year and faces an uncertain future in Congress.