Both EPA and FERC received comments Dec. 20 on how reliability can be maintained under the former’s power plant rule that requires fossil fuel-fired units to curtail their emissions. (See New EPA Standards Designed to not Jeopardize Grid Reliability.)
EPA took comments on a supplemental request it issued in November seeking additional input on how to ensure reliability under its proposal. FERC took comments on its annual reliability technical conference, which featured testimony from EPA and others on the rule. (See FERC Dives into Reliability Implications of EPA’s Power Plant Rule.)
The two leading Republicans on the agencies’ oversight committees, Sen. John Barrasso (R-Wyo.) of the Energy and Natural Resources Committee and Sen. Shelley Moore Capito (R-W.Va.) of the Environment and Public Works Committee, filed a letter that expressed their continued doubts about the power plant’s feasibility.
“We urge the EPA to rescind its Clean Power Plan 2.0 proposal and make affordability, reliability and the limits of its authorities under the Clean Air Act cornerstones of any future proposal,” the two senators said. “The more time that has passed since the proposal, the more issues with the Clean Power Plan 2.0 have been uncovered. The proposal is beyond repair and must be withdrawn.”
The senators had also reached out to all four FERC commissioners for their thoughts on the rule and its impact on reliability, and those responses were filed with EPA. Both of the Democratic appointees indicated they are taking reliability seriously but did not bash the proposal like their Republican colleagues.
“The most significant threat to resource adequacy does not stem from a particular rule of any agency but rather from an energy system that was not built for the combination of challenges we face today, including extreme weather and a corresponding increase in unplanned outages, a changing resource mix, rising demand and more,” Commissioner Allison Clements (D) said in her response.
Commissioner Mark Christie (R) repeated his assertion from his testimony before the Energy Committee this year that the country was headed for a reliability crisis. (See Senators Praise Phillips, FERC’s Output at Oversight Hearing.)
“It is clear that the wave of retirements of dispatchable [electric generating units], especially coal but also gas — which is already happening at an unsustainable pace — will be intensified if Rule 2.0 ever goes into effect,” Christie said. “Even the threat of the pending Rule 2.0 is exacerbating the pace of retirements and having a chilling effect on the planning of new EGUs, because of its negative effect on the ability of existing dispatchable EGUs to obtain financing and its effect on state-level integrated resource plans.”
The Electric Power Supply Association’s members own 150,000 MW of those EGUs; it told EPA it was disappointed the agency did not reach out to those generation owners whose units will be directly impacted by the rule.
EPSA argued the hurdles to a nationwide buildout of the infrastructure needed to implement the “best system of emissions reduction” proposed — carbon capture and storage, or hydrogen — make the rule infeasible. It said that would need to be tackled in any “permitting reform” efforts.
“One need not look further for evidence of this view than recent announcements from two carbon pipeline developers (Navigator CO2 and Wolf Carbon Solutions U.S.) that they have canceled or temporarily withdrawn applications for major carbon pipeline investments citing the ‘unpredictable’ or ‘stringent’ nature of the regulatory process,” the trade group said.
On top of the need for additional infrastructure, retrofitting thousands of turbines will require a substantial supply chain of physical materials.
“The CCS/hydrogen industry will be built from scratch, requiring years to develop the supply chain for both the manufacturing of materials and a transportation network to deliver them,” EPSA said. “Even if physical materials are available, a trained, skilled workforce with the requisite knowledge to successfully install these upgrades doesn’t exist.”
EPSA also seconded Christie’s concerns about being able to finance the needed upgrades, noting the Inflation Reduction Act’s 45Q tax credit for carbon capture requires construction to start by the end of 2032, years before several compliance deadlines proposed by EPA.
The Edison Electric Institute told FERC that its investor-owned utility members are already in the middle of a long-term transformation in how electricity is generated, and they are committed to continuing that as fast as they can, while keeping reliability and affordability “front and center.”
The sector’s emissions were already at 1984’s levels as of the end of 2022 because of the growth in renewables, efficiency and demand-side resources, and a significant portion of the coal-fired fleet has been replaced by green energy and natural gas. EEI agrees with the long-term clean energy vision embodied in EPA’s proposal.
“With respect to reliability and in the development of such tools, EPA should be focused on compliance flexibility,” EEI said. “Compliance flexibility can help to limit the need for the use of any reliability mechanism, as well as the impact of extreme reliability events, by providing states and units with additional regulatory pathways and tools for compliance.”
Key compliance flexibilities include using mass-based approaches, annual and multiyear averaging, allowing states to recognize how plants will be operated in the future and the emissions benefits of retiring exiting units through appropriate subcategories. EPA’s subcategories give grid planners, and others in charge of reliability, concrete information on when specific units are going to retire, allowing them to be replaced in an orderly fashion.
However, when reliability issues cannot be addressed with those tools, EPA needs to have a mechanism available so generators can stay in compliance with the rule and reliability standards. While the subcategories give an idea of when units will retire, whether their closure will lead to reliability risks will not be known until later on, and that could require an additional mechanism to preserve reliability, EEI said.
It argued that EPA needs a mechanism that would allow for units needed for resource adequacy to stay open — more urgent emergencies can be covered under the Federal Power Act’s Section 202(c), which allows the Department of Energy to issue an order keeping plants running without being liable for violations of environmental regulations.
“The reliability challenges might require resources to increase their generation above forecasted levels or to delay a planned retirement until other assets (including transmission assets) are brought into service,” EEI said. “These scenarios often are time limited but may extend beyond the 90-day window envisioned by FPA 202(c).”
The Clean Air Task Force and Natural Resources Defense Council filed joint comments, agreeing with EEI that the industry is already changing significantly under business-as-usual regardless of EPA’s rule.
“Existing trends away from the most polluting plants, reinforced by the IRA incentives, mean that the most stringent performance standards under this rule will apply to a small portion of the fleet,” they said. “Experience demonstrates that transitions to a cleaner grid can be achieved reliably.”
EPA’s proposal is only modestly incremental to those changes that are already baked in, and it is designed to accommodate reliability while cutting emissions, the groups said.
“It is imperative for EPA to issue standards as required by the Clean Air Act to protect public health and the environment, to secure and extend the emission reductions expected from current trends and incentives,” they said. “EPA has a long history of fulfilling its environmental statutory mandate in the context of an evolving power sector without jeopardizing reliability. In fact, the extreme weather caused by climate change has been a major factor in many reliability events in recent years, in which fossil sources frequently proved to be the least effective at addressing shortfalls in electricity supply.”
