FERC plans conferences on EPA carbon rule impacts

Thursday, December 11, 2014

If the U.S. Environmental Protection Agency's proposed carbon regulations for power plants are adopted, how will state and regional efforts to comply with the rule impact the electric power grid?  If states need new infrastructure like electric transmission lines or natural gas pipelines to comply with the EPA rule, what can be done to reduce regulatory barriers to new infrastructure development?

A fossil fuel-fired power plant near New York, NY.
The EPA's proposed Clean Power Plan rule would require states to meet customized standards for how much carbon dioxide their electric power sector emits per unit of useful energy.  As envisioned by EPA, each state can choose its own path to meeting these standards by combining elements from a menu of four "building blocks": better coal plant efficiency, increased utilization of natural gas plants, increased renewable energy, and increased energy efficiency.

The implications of different approaches to complying with the proposed rule will be the focus of an upcoming series of technical conferences to be held by the Federal Energy Regulatory Commission.  According to the Commission's public notice, state, regional and/or federal plans for compliance with the proposed Clean Power Plan may impact Commission-jurisdictional markets, grid operations, and infrastructure.  The series of technical conferences is designed to provide forums for identifying issues and solutions.  The Commission also plans to provide an opportunity to discuss how compliance scenarios may impact existing infrastructure and drive the need for additional infrastructure, especially new electric transmission and natural gas pipeline facilities, and whether there are regulatory barriers that need to be addressed, and by whom, to ensure the timely development of those facilities.

The conferences will begin with a Commission-led National Overview session at FERC headquarters on February 19, 2015.  The National Overview will address whether regulators and industry have the appropriate tools to identify any reliability or market issues that may arise, potential strategies for compliance with the EPA regulations and coordination with FERC-jurisdictional wholesale and interstate markets, and how to coordinate reliability and infrastructure planning processes with state and/or regional environmental compliance efforts to ensure the adequate development of new infrastructure and to manage any potential reliability and operational impacts of proposed compliance plans. The Commission will offer a live webcast of the National Overview, which will be archived for three months.

Following the National Overview technical conference, the Commission will hold three regional technical conferences, on dates to be announced, in Washington, DC, St. Louis, MO, and Denver, CO.  Each regional event will include discussion of the specific potential impacts to regional reliability, power system operations and generator dispatch, and needed infrastructure upgrades.

Will the EPA's Clean Power Plan be finalized and take effect?  If so, when -- and in what form?  Federal carbon emission limits are as yet untested in the U.S., and other innovative regulatory efforts have met with years or even decades of delay before taking effect.  At the same time, the prospect of federal carbon rules affecting the electric power sector spurs energy regulators to take a serious look at potential impacts of the carbon rules, and to begin planning for their possible future effectiveness.

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