The Southwest Power Pool on Tuesday hosted what amounted to an online mixer for the air regulators from the 14 states in which SPP ensures electric system reliability and operates electricity markets.
The webinar was more than an occasion toget acquainted for the regional transmission organization and the group of regulators that will be drawing up state plans to comply with the U.S. EPA Clean Power Plan.
It was the start of a consultative process SPP hopes to engage in with states as they prepare their plans to comply even as some political leaders pursue litigation or a "just say no" response.
It was also the first instance of an RTO openly meeting with air regulators about the EPA plan.
"Our No. 1 responsibility is to help our members work together to keep the lights on, not only today but in the future. In fact, that’s our mission statement," said Lanny Nickell, SPP’s vice president of engineering. He led the webinar, which included state air agency officials, utility commissioners and SPP utility members.
"We have the skill set and expertise to best assess and determine whether or not the state plans that are being developed in compliance with the Clean Power Plan can in fact accomplish that mission," Nickell said in an interview.
Nickell gave the regulators an overview of SPP’s basic functions of ensuring reliability and dispatching its 825 power plants to provide electricity to 18 million people over a service territory spanning 575,000 miles.
And he filled them in on the results of studies SPP has conducted over the past year on aspects of the EPA rule to curb carbon emissions from power plants.
SPP will revisit regional compliance costs
Earlier this year, before the final rule was issued, SPP produced a study on the potential for regional compliance but found the cost would be an estimated $2.9 billion a year (EnergyWire, April 9).
SPP "absolutely" will revisit the cost of compliance now that EPA has extended the compliance deadline and allowed states or regions greater flexibility in their compliance plans, Nickell said.
"You should be able to take away from those studies that it’s about 40 percent more expensive to go it alone than be involved in a regional approach," he said.
Among the studies’ findings were that state-by-state compliance required 114 percent more generation retirements, increased generation at risk for retirement by 9 percent, and required 185 percent more new natural gas generation and roughly the same amount of new renewables.
Not only is state-by-state compliance more expensive, but it is "more disruptive than a regional approach to the reliability and economic benefit provided by SPP’s markets," the RTO presentation said.
More new generation and transmission infrastructure would likely be "needed for state-by-state than for regional compliance," SPP found.
How long will it take?
Nickell warned states that there could be "overlapping impacts" from the fact that 12 of SPP’s 14 states also have their electricity overseen by one or more RTOs, planning authority or reliability coordinator.
States should try "to implement and plan for an approach that really is interoperable with other states. For example, decide to establish a carbon trading market with all of the other states. To me, that kind of an approach would carry with it a lot less risk or concern than something that is more generator specific," Nickell said.
"It’s going to necessitate a higher degree of coordination to fully understand where those overlapping impacts might reside."
That’s where assessing state plans comes in. One question states had Tuesday is how long it might take SPP to perform an assessment.
"I still don’t have an answer for them," Nickell said.
"We’ve not assessed anything like this before. We don’t yet have a real good idea of how long it’s going to take to do an assessment.
"We don’t know to what extent you’re going to put a lot of detail into your state plan; we don’t if it’s going to be more general as opposed to specific. So until we start getting a better feel for what each state is thinking, it’s hard for me to tell you with any accuracy how long it would take us," he said.
The political battle over the EPA rule is something that "we’ll certainly have to deal with as best we can," Nickell said. But "that’s not something we want to get involved in."
"We respect the fact that some of the states will litigate; that’s their right to do so. We just hope and encourage them to be working a parallel path so that in whatever event occurs, that they’re ready to implement something that will be reliable and cost-effective."