FERC had no ‘meaningful’ input on climate rule — commissioner 

Source: Hannah Northey, E&E reporter • Posted: Thursday, January 22, 2015

U.S. EPA for months has said it worked with grid overseers when crafting its landmark Clean Power Plan in order to protect grid reliability, but at least one member of the Federal Energy Regulatory Commission is publicly questioning the depth of that input.

Republican FERC Commissioner Tony Clark told House and Senate Republicans in a letter this month that no commission members or agency staff had any “significant or meaningful role” in providing analysis to EPA on grid reliability on the Clean Power Plan, either before or after the proposal was released last summer.

Clark said a Dec. 3, 2014, letter FERC Chairwoman Cheryl LaFleur sent Sen. Lisa Murkowski — the then-ranking Republican and now chairwoman of the Senate Energy and Natural Resources Committee — shows that FERC staff had a “handful of high-level, general discussions based on a limited review of only portions of the CPP proposal that were provided to FERC.”

LaFleur told Murkowski in the letter that EPA in early February 2014 at the commission’s Washington, D.C., headquarters “in very general terms” described parts of the Clean Power Plan to her and other commission members. And in March, FERC staff met with officials from EPA and the Energy Department to discuss concerns that grid operators had with the proposal.

The chairwoman also outlined meetings in April, including a telephone conference in which FERC staff provided comments on the draft related to reliability, including the proposal’s “contemplated increases in the capacity factor for natural gas combined cycle units, renewable generation and the coal heat rates” and the need for new infrastructure to comply with the proposal.

FERC also commented on the “advisability” of regional collaboration among states and some form of a “safety valve” — a mechanism that grid operators have since proposed to ensure power supplies remain stable should plants be shuttered too quickly under the rule.

LaFleur said FERC “can and should” advise EPA on the effects its rules could have on the grid, and FERC staff members have communicated “regularly” with EPA.

But Clark said the commission had limited input and little-to-no role in shaping the EPA proposal. He said he will raise concerns at a series of technical conferences FERC is holding on the EPA proposal — the first on Feb. 19 at FERC headquarters in Washington, D.C. Subsequent staff-led regional technical conferences will be held in Washington, St. Louis and Denver.

“Altogether, the limited input provided by FERC staff to the EPA and the lack of input from the commissioners reinforces the notion that the meetings with EPA were insubstantial in shaping the CPP proposal and mitigating potential reliability impacts,” Clark wrote. “Nothing I have seen before or since would suggest otherwise.”

Clark, who hails from North Dakota, also warned that FERC in the past hasn’t had to tackle reliability problems tied to EPA rules because reserve capacity margins have been generous, but “this is a luxury we no longer have.”

Liz Purchia, a spokeswoman for EPA, said the agencies met on “several levels,” including a meeting with LaFleur. “During the development of the Clean Power Plan proposal, during the interagency review process, and after the proposal was issued, EPA held meetings with FERC senior staff, as well,” she said.

EPA also confers with the commission regulator on matters related to reliability, including monitoring states’ and utilities’ implementation of the Mercury and Air Toxics Standards (MATS) rule and the Clean Power Plan, she said. “We are committed to continue working closely with FERC and other federal agencies,” Purchia said.

Still, Clark’s comments call into question just how closely federal grid overseers worked with EPA on a rule that some have warned could affect grid reliability.

Republicans began probing the agencies’ level of cooperation after the release of a high-profile report in November 2014 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, 2014).

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.

Clark’s comments have aligned with those of FERC Commissioner Philip Moeller — another Republican member of the agency — in the past. In their response to Congress, Democratic Commissioners Colette Honorable and Norman Bay, slated to chair the agency later this year, said they couldn’t weigh in on the issue.