FERC calls for reliability mechanism in Clean Power Plan
FERC Chairman Norman Bay and his fellow commissioners — two Republicans and two Democrats — in a joint letter to U.S. EPA acting air chief Janet McCabe outlined the parameters of a “reliability safety valve” to resolve conflicts between the final rule to curb carbon emissions and FERC-approved reliability standards.
FERC suggested a safety valve could lay out a process through which affected entities can petition EPA for a temporary waiver or adjustment to the emissions requirements or compliance timelines in their approved plans to maintain reliability. If EPA adopts such an approach, FERC should have a “clearly defined” role just as it did when the Mercury and Air Toxics Standards was implemented and the industry was given the option of seeking a fifth year to comply.
But not everyone agreed the commission, which would not comment on the letter, was calling for action.
David Weiskopf, an attorney for NextGen Climate America, said there is sufficient technical analyses from the Brattle Group, the Energy Department and others that have found no cause for reliability concerns. FERC’s letter, he added, correctly emphasized the continuing role of existing robust safeguards.
“That’s why, rather than recommending any new procedures or endorsing any utility requests for less protective emissions reduction targets, FERC has instead offered to assist EPA as the Clean Power Plan is finalized and implemented, in case any of these industry claims are eventually found to have genuine merit,” Weiskopf said.
FERC in the letter also spelled out what its role would not include.
Bay and his colleagues made clear that the agency has no authority to approve state plans or to order that generation or transmission be built. Nor will FERC wade into debates about how states should comply, the commissioners wrote.
“The commission’s role would be to consider whether a specific set of loads, resources and grid facilities would cause a reliability standard violation or reserve margin deficiency, not whether the applicant or EPA should pursue a different set of options and, if so, which options,” they said.
And when it comes to reviewing state compliance plans, FERC commissioners said a “generally adequate” process already exists through which grid operators and overseers and reliability organizations can identify problem areas. Only then would FERC step in.
“As appropriate, the commission could then review the analyses, suggest or request additional or modified analyses or, in limited cases, perform analyses itself,” they wrote. Additional technical conferences or state outreach might be in order should areas or issues of concern arise, FERC said.
FERC’s response arrives on the heels of McCabe sending a letter to Bay and his colleagues on May 6, in which she said the agency was considering a reliability safety valve in the final rule.
The commission’s letter received a warm welcome from the EPA, a top Republican senator, green groups and the industry.
“We thank FERC for engaging with EPA on the Clean Power Plan and its potential impacts on the operation of the electric system,” said Jeff Ostermayer, a spokesman for the Edison Electric Institute. “In particular, we appreciate that FERC convened a robust series of technical conferences to discuss with all stakeholders the complexities of operating and maintaining a reliable electric grid, and that FERC weighed in with EPA as to how to protect reliability as the Clean Power Plan is implemented.”
EPA spokeswoman Liz Purchia agreed. “The information and insights that we’ve gleaned from these sessions and discussions have helped us in our continued focus on crafting a rule that provides sufficient time, flexibility and latitude for states, utilities and reliability organizations to take the necessary steps to ensure that all Americans continue to have access to clean, affordable and reliable energy,” she wrote in an email.
Robert Dillon, a spokesman for Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate Energy and Natural Resources Committee, called it a “positive step, and it’s good to see the commission responding to the concerns it heard during the recent round of technical conferences.”
Dillon noted that Murkowski joined House Republicans last year in calling on FERC to take reliability concerns tied to the Clean Power Plan seriously. Both chambers of Congress are crafting a comprehensive energy bill and have included provisions that would require reliability reviews as new environmental regulations take effect.
“Now we expect EPA will cooperate with the agency responsible for actually ensuring the reliability of the grid,” Dillon said.
Sue Tierney, a senior adviser with the Analysis Group, said the letters show FERC and EPA are respecting their jurisdictional boundaries and that there are a number of proposals circulating for ways to construct a reliability mechanism.
“It’s not as though that question has been definitively answered because we don’t known the final rule or how the markets will respond,” she said. “But FERC really listened to people, did a tremendous amount of outreach and came away feeling as through its ability and the industry’s ability to ensure reliability won’t be jeopardized.”