Much of the consternation at the NARUC winter conference concerned EPA’s planned CO2 emission limits on existing generating plants (Section 111(d) of the Clean Air Act).
The regulations, expected in June, could add 60 to 100 GW in coal retirements beyond those already expected from current air and water regulations, according to the Edison Electric Institute.
Janet McCabe, EPA’s acting assistant administrator for the Office of Air and Radiation, who had addressed NARUC’s annual conference in November, was back again to provide an update on the agency’s outreach efforts.
EPA Listening Sessions
McCabe said EPA has held more than 200 meetings through January to listen to industry and state regulators’ concerns about the pending regulations.
“What we’ve been hearing: Reliability is key. Affordable energy is key. Flexibility is absolutely critical but states don’t want to be handed a blank sheet of paper. They want guideposts,” she said.
McCabe said the proposed regulations will reflect those concerns while seeking to minimize stranded assets and acknowledging differences among states in their fuel supplies and the energy intensity of their economies.
EPA’s charm offensive won praise from acting FERC Chair Cheryl LaFleur and Jon McKinney, a member of the West Virginia Public Service Commission. “In 30 years in the chemical industry and eight years as a commissioner, it’s the first time I’ve worked with EPA so closely,” McKinney said.
One of the biggest questions is whether EPA will set limits by state or establish regional caps.
ISO/RTO Council Proposal
In January, the ISO/RTO Council proposed a “Reliability Safety Valve” similar to that adopted by EPA in the Mercury and Air Toxics Standards to ensure the GHG rule includes a process to assess and mitigate reliability impacts. It also proposed allowing states the option of meeting their obligations through regional efforts whose efforts could be coordinated, and results measured, by RTOs such as PJM.
LaFleur said the regulations may require PJM and other regional transmission operators to modify their rules to accommodate state or regional plans for achieving emission cuts. “If we work together across state lines there might be an upside to help some of these states that have challenges,” she said.
“There’s lots of precedents already for [EPA] working across state lines,” McCabe said. “There’s no doubt that the program will be able to accommodate that.”
Moeller said he feared the potential for conflict between state implementation plans and interstate energy markets. Asked how FERC might referee such conflicts, he responded: “I think it’s a little early for [FERC] to be considering our role.”
Jurisdiction Questions
Colorado Public Utility Commission member Joshua Epel questioned how EPA planned to enforce the regulations. “You could be trying to bind state PUCs, and frankly I don’t think you have the authority to do that,” said Epel, who said the rules should allow a continued role for Colorado-mined coal. “We have an enormous challenge. We’ll be working together, but sometimes we’ll be slugging it out. That’s just the nature of what this is going to be.”
Joe Goffman, senior counsel in EPA’s Office of Air and Radiation, said “maybe it’s the regional NARUC entities that are best positioned … to provide a platform for” compliance.
