Regulation

Greenwire's Northey discusses growing pressure for FERC to act on Clean Power Plan

Following yesterday's Federal Energy Regulatory Commission technical conference on U.S. EPA's Clean Power Plan, is there any more clarity on exactly what FERC's role is, or could be, on EPA's regulations? On today's The Cutting Edge, Greenwire reporter Hannah Northey discusses questions on infrastructure and a reliability safety valve emerging from the meeting.

Transcript

Monica Trauzzi: Welcome to The Cutting Edge. FERC held its first technical conference on EPA's Clean Power Plan yesterday, and Greenwire's Hannah Northey was there. And she's here now to bring us up to speed on all the key details emerging from the discussions. Hannah, is there any further clarity now on what FERC's role is or could be on the Clean Power Plan after yesterday's meeting?

Hannah Northey: Yeah, yesterday FERC commissioners really made clear that they have an advisory role. This is EPA's rule, the Clean Power Plan, and FERC is really there to counsel and advise the agency as the rule goes into effect. At one point, FERC Commissioner Colette Honorable said, "We're not here to negotiate with the EPA," so they really made clear that they are going to facilitate conversations. And -- but what -- you know, down the road we don't know what's gonna fall into FERC's lap. A lot of these issues with infrastructure -- pipeline and transmission, or, you know, different rates, should they include carbon into the market structure -- those could be areas where FERC could get more involved. But for right now, FERC is really facilitator of conversations, and we're gonna have regional conferences in Denver, St. Louis, and then D.C. again. So that's really the role that they're playing right now.

Monica Trauzzi: And did the conference lay the groundwork for a potential jurisdictional battle between FERC and EPA?

Hannah Northey: I would say no. That's my opinion. But right now, EPA has really made clear what it can do under the Clean Air Act, and FERC is really stating its authority under the Federal Power Act. So, for example, FERC said, "We can't make any changes to the Clean Power Plan. We're not gonna do that for you; that's EPA's authority. That's their role in all of this." So I think more of the discussions yesterday touched on the conflict possibly between states and the EPA, especially if states can't comply, or maybe there's some hesitation on their part to include some of these traditionally voluntary programs into their compliance plan. So really it's between state and EPA, but not so much FERC and EPA.

Monica Trauzzi: Chopped liver, sitting plant -- these were phrases you reported were used during the meeting to urge FERC to take action ahead of the final rule. What does industry want to see FERC do on infrastructure?

Hannah Northey: Yeah, there was a big push for FERC not to be a silent bystander in all of this. The industry is really concerned about whether or not you can get the power lines and the pipelines in place if certain plants have to shut down, and they really want an advocate. They want an educator. They want FERC to explain to EPA how difficult all of this could be, kind of how long it takes to build. Transmission can take up to a decade. Major pipeline projects can take up to three years, best-case scenario, one commissioner told me. So they want an advocate in FERC.

What it kind of comes down to, though, is that FERC is legally limited under its own authority, under the Federal Power Act, what it can and cannot do. But FERC has been very receptive and EPA has been very receptive, and there's an ongoing dialogue, so they want FERC to be in their corner.

Monica Trauzzi: What did you hear from grid operators on the idea of a safety valve and how that might help them comply?

Hannah Northey: Yesterday, FERC Chairman Cheryl LaFleur kind of -- you know, kind of encompassed what was said by saying there were a lot of different flavors out there for what a reliability valve, safety valve, could look like. One idea -- the most detailed proposal was given by the nine national grid operators. It's called the ISO/RTO Council. And they spelled out a process in which, you know, concerns could be raised, and then the EPA would have to eventually sign off on that. But there are a lot of different ideas floating out there. There's no final rule right now. So another idea from Republican Commissioners Tony Clark and Philip Moeller was that potentially they would put all the state plans together and see how they match up. And if there are reliability concerns, well, FERC is in a really good place to analyze that type of a situation.

So overall, again it's up to the EPA. There was a call for the EPA to include that into its final rule, but that's for that agency to decide. And right now, it's all about expressing concerns and talking about what could happen.

Monica Trauzzi: So is the safety valve needed if EPA makes some adjustments to its implementation timeline?

Hannah Northey: Right. So there's a lot of talk about this interim 2020 deadline and the final 2030 deadline for states to comply. And Edison Electric Institute has said that if -- the real priority is changing those timelines. They want to ease it. And if that's done, then there will be less of a need for this safety valve. So we don't know what's gonna happen yet; we'll see.

Monica Trauzzi: All right, a lot of interesting stuff coming out of this meeting. Thanks for coming on the show.

Hannah Northey: Thank you.

Monica Trauzzi: More Cutting Edge coming next Friday. We'll see you then.

[End of Audio]

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