House panel to grill FERC on grid reliability under EPA carbon rule

Source: Katherine Ling, E&E reporter • Posted: Wednesday, July 23, 2014

The role the Federal Energy Regulatory Commission played in preparing a proposed EPA rule to regulate carbon emissions at existing power plants as well as how the agency has determined the rule will affect electricity service will be the focus of a subpanel hearing next week, the Energy and Commerce Committee announced yesterday.

The hearing is part of a series being held by the Energy and Power Subcommittee since EPA announced the draft Clean Power Plan on June 2.

The panel heard from EPA acting Air Administrator Janet McCabe at a hearing last month, in which full committee Chairman Fred Upton (R-Mich.) said the plan was a bid by EPA to usurp the authority the Federal Power Act delegates to state governments and public utility commissions (Greenwire, June 19).

The four current FERC commissioners have been invited to testify at the upcoming hearing, as well as Norman Bay if he is sworn in by the White House in time for the event, according to the committee. Last week, the Senate confirmed Bay for a four-year term and approved current acting Chairwoman Cheryl LaFleur to another five-year term on the commission (E&ENews PM, July 15).

The subcommittee sent four pages of questions to FERC ahead of the hearing. They include requests for details on how much and often EPA consulted the independent energy regulator on reliability of the grid, who actually crunched the numbers for EPA’s reliability analysis and whether FERC has done its own independent analysis of how multiple layers of EPA regulations may affect the nation’s grid reliability, fuel diversity and stranded assets.

Other particular concerns for the panel focus on the interaction of the market-based grid dispatch operation that currently exists, versus one based on environmental priorities within a possible state implementation plan. The subcommittee also has doubts regarding the nation’s natural gas infrastructure and gas-fired electric generation capacity, the impacts of intermittent renewable energy resources on the grid and the integration of demand-response resources.

“I have serious concerns about how President Obama’s extreme policies will impact the nation’s electric grid,” subcommittee Chairman Ed Whitfield (R-Ky.) said in a statement. “EPA’s ‘clean power plan’ does not explain how states and utilities will be able to keep the lights on while being forced to limit power options. Any plan which seeks to prohibit the use of coal — one of our nation’s most abundant and affordable energy sources — will surely drive up energy costs and threaten reliability.”

He added, “I look forward to hearing the FERC Commissioners’ perspective on these new regulations and learning about what steps the agency is taking to ensure consumers continue to have access to affordable and reliable electricity.”

FERC has been relatively silent on the EPA rules. But LaFleur noted at the last meeting that during her additional time at the head of the agency, she would continue to focus on energy infrastructure to support changes in the resource mix, natural gas pipeline networks, work in natural gas-fired electric markets, transmission improvements as called upon for reliability and increased renewable technologies.

“As the carbon regulations get more developed, there will certainly be adaptations in our market that we will have to get started on,” she said (Greenwire, July 17).