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FERC wades into reliability fight over EPA's Clean Power Plan

Federal regulators are planning a series of technical conferences beginning in February to weigh the consequences of state and industry efforts to comply with U.S. EPA's controversial proposal to curb carbon dioxide emissions from power plants.

The move announced yesterday by Federal Energy Regulatory Commission Chairwoman Cheryl LaFleur is responsive to calls by Congress, her fellow commissioners and electricity industry stakeholders who have raised concerns about whether compliance with the EPA Clean Power Plan as proposed will endanger grid reliability or adversely affect regional wholesale electric markets.

"The commission clearly has a role to play in ensuring that the nation's energy markets and infrastructure adapt to support compliance" with the Clean Power Plan, LaFleur said in a statement.

The first meeting will be a national overview of the EPA plan at FERC headquarters in Washington, D.C., on Feb. 19. Subsequent staff-led regional technical conferences will be held in D.C., St. Louis and Denver on dates to be determined.

The meetings will focus on "whether state utility and environmental regulators, regulated entities and others have the appropriate tools to identify reliability and/or market issues that may arise," FERC said.

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Other topics the agency seeks comment on are strategies for complying with the EPA regulations and coordinating with FERC-jurisdictional wholesale and interstate markets, and how planning entities, industry and states coordinate reliability and infrastructure planning processes with environmental compliance efforts to ensure the adequate development of new infrastructure and to manage potential reliability and operational impacts of compliance proposals.

FERC would like EPA to actively participate in the technical conferences, "as they did in the [Mercury and Air Toxics Standards rulemaking] technical conference," said FERC spokesman Craig Cano.

Until yesterday, LaFleur had been noncommittal in response to calls for a technical conference. But she had expressed concern about the proposed rule's failure to include a "reliability mechanism" to protect the integrity of the grid.

"I think we're going to have to get involved in making sure that reliability is protected as the Clean Power Plan is implemented," LaFleur said in November. "Protecting reliability isn't optional. The lights are going to stay on. So that this should somehow be built into the process seems to make sense" (EnergyWire, Nov. 10).

EPA welcomed the commission's announcement. Liz Purchia, a spokeswoman for EPA, said the agency devoted significant attention to ensuring the rule didn't interfere with the nation's reliable and affordable supplies of power and has reached out "from day one" to the public, stakeholders and federal partners including FERC.

Purchia also defended EPA's track record on safeguarding the grid. "In the agency's 40-year history, emissions from power plants have decreased dramatically, improving public health protection for all Americans, while the economy has grown," she said. "During this time, there have been no instances in which Clean Air Act standards have caused the lights to go out."

Sen. Lisa Murkowski (R-Alaska), who will lead the Senate Energy and Natural Resources Committee next year, said FERC's announcement didn't make up for what she sees as EPA's lack of coordination in the run-up to the proposed rule.

"A national conference, followed by three regional technical conferences, is no substitute for EPA's failure to engage FERC and DOE in a formal, documented process to address the impact on electric reliability of EPA's series of major rulemakings in recent years," Murkowski said in a statement. "I remain hopeful however that the conferences will be useful to develop a better public record on these crucial questions, and I will remain as vigilant on this issue as I have been since 2011."

Hill pressure

FERC has been facing increasing pressure on Capitol Hill and from industry groups to weigh in on the potential effects of how states implement EPA's proposed rule under Section 111(d) of the Clean Air Act.

That push gained steam after the release of a high-profile report in November by the North American Electric Reliability Corp., the federally designated grid reliability overseer. It warned that EPA's proposal threatens reliable electricity delivery in 2020, the agency's initial compliance deadline (EnergyWire, Nov. 5).

NERC found that the EPA proposal's 2020 target would cause the retirement of 108,000 to 134,000 megawatts of existing generation capacity, primarily at coal plants, and questioned whether the nation's bulk power system could successfully shoulder such fast-paced changes.

House and Senate Republicans earlier this month called on FERC to publicly meet with EPA, the Energy Department, state regulators and power companies to discuss grid reliability concerns and explain what they say is a failure to coordinate implementation of EPA's proposal to cut carbon emissions (Greenwire, Nov. 25).

In the past month, two Republican members of FERC -- Tony Clark and Philip Moeller -- have said the commission should have a more formal advisory role as the EPA proposal takes shape.

Clark went so far as to advocate that EPA should have FERC review individual state plans to comply with the Clean Power Plan to ensure that implementation would not threaten the grid or electricity supply (EnergyWire, Dec. 5).

Yesterday, he issued a separate statement thanking LaFleur and welcoming the increased dialogue. Clark said FERC is "uniquely situated" to vet issues that arise as the Clean Power Plan is implemented, should the rule survive legal challenges.

"It is not difficult to envision scenarios in which a patchwork-quilt of implementation plans, if improperly crafted, either conflict with one another or with the Federal Power Act itself in ways that harm electric reliability and distort prices," Clark said. "FERC is uniquely situated to vet these issues so that such scenarios are avoided."

Reporter Hannah Northey contributed.

Twitter: @RodKuckro | Email: rkuckro@eenews.net

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