We have tools to ensure grid reliability under carbon rule — EPA 

Source: Emily Holden, E&E reporter • Posted: Friday, February 27, 2015

U.S. EPA Chief Gina McCarthy told lawmakers yesterday that her agency is prepared to deal with potential electric reliability problems under the Clean Power Plan, whether through a “waiver or another process.”

While McCarthy maintained that the proposed rule would not affect reliability, she said EPA has the necessary tools to address situations that might arise under the landmark standards to cut carbon emissions from coal-fired power plants.

“We would be able to work through the issues, whether it’s a waiver or another process. The tools are available to us to use,” McCarthy told Ohio Republican Bob Latta at a House Energy and Commerce subcommittee hearing on EPA’s budget. Latta asked McCarthy specifically whether a waiver would be available in states that think they cannot comply without jeopardizing the reliability of the power grid or imposing high costs on customers.

After the hearing, McCarthy told reporters that she wasn’t conveying whether a specific type of reliability “safety valve” might be written into the final rule, which is due this summer.

“We always are designing our rules in a way that ensures that we won’t threaten reliability and affordability of the energy system,” McCarthy said. “And clearly, the flexibility in this rule ensures that. We’ll take a look at the comments that come in, and if we need to make adjustments or work harder with [the Department of Energy] and [the Federal Energy Regulatory Commission], we’ll do that.”

Prior safety valves, such as for the Mercury and Air Toxics Standards, allowed power plants to apply for waivers to continue running in spite of environmental regulations in order to ensure grid reliability. But the Clean Power Plan asks states to write plans for cutting emissions, rather than directing individual plants to make changes. So it’s unclear how those type of waivers would work under the proposed rule.

‘Looking under the hood’

FERC has been hearing from utilities, regional grid organizations and state officials from around the country that a number of reliability mechanisms might be needed to handle unforeseen circumstances that could cause power outages (ClimateWire, Feb. 20).

The draft rule would reduce carbon emissions from the power sector 30 percent below 2005 levels over the next 15 years, pushing major changes to the grid, including decreases in coal-fired electricity and increases in natural gas use, renewable energy and customer-side energy efficiency measures. Grid organizations have said those changes are much more feasible if EPA amends or eliminates its interim goals for states, which begin in 2020, and if the agency implements safeguards to slow down or halt state plans if they might cause power outages.

FERC Chairwoman Cheryl LaFleur responded to McCarthy’s comments yesterday from a regional conference on the Clean Power Plan in Denver.

“All of us are dedicated to making sure there aren’t reliability concerns,” LaFleur told EnergyWire. “It’s a question of, ‘OK, how do we ensure that? What has to be in the final rule?'” (EnergyWire, Feb. 26).

LaFleur said the purpose of the regional workshops is to “look under the hood” for tools to ensure reliability.

“Whether you call it a ‘valve’ or a ‘waiver’ or whatever noun you use, what kind of mechanism would best work to protect reliability in a way that’s consistent with the purposes of the Clean Power Plan?” she said. “Every time we talk about it, I think we understand a little better what that might need to look like.”

Formalizing a backstop

While there’s no definite consensus on how a reliability backstop should work, the association of grid organizations, the ISO/RTO Council, argues it should be explicitly laid out in the rule, rather than added on later.

Craig Glazer, vice president for federal government policy at PJM Interconnection, the Mid-Atlantic grid organization, said EPA has statutory authority under the Clean Air Act to include a reliability safety valve in the final rule. But if EPA doesn’t spell out that mechanism, it’s unclear what other existing tools might be available, he said.

One possibility that has surfaced in testimony at FERC technical conferences is a process for electric utilities to seek permission from the Department of Energy to continue to run plants under a provision in the Federal Power Act. But EPA’s rule is written under a different statute, the Clean Air Act.

FERC Commissioner Tony Clark noted in Denver yesterday that the Federal Power Act is not “subservient” to the Clean Air Act or vice versa, and that creates a conflict.

Glazer said the process has only been used once, and DOE took months to grant the waiver. Even then, the company was sued for violating environmental laws, he said. Plus, he said, the DOE process is only meant for real-time emergency situations.

“We don’t ever want to get to that point,” Glazer said. “That is a tool, but a very insufficient tool.”

Meanwhile, EPA seems be more proactively defending against reliability complaints. A blog post from EPA spokesman Tom Reynolds yesterday maintained that reliability is a “top issue” and lashed out at “special interest critics” who have lodged reliability complaints (E&ENews PM, Feb. 25).