FERC and EPA's Clean Power Plan

Wednesday, January 28, 2015

Following the U.S. Environmental Protection Agency's 2014 proposal to regulate carbon emissions from electric power plants and other major sources, federal energy regulators have scheduled a series of public technical conferences on how the Clean Power Plan may affect electric reliability, wholesale electric markets and operations, and energy infrastructure.

On June 2, 2014, the U.S. Environmental Protection Agency announced the Clean Power Plan, its proposed rule under Section 111(d) of the Clean Air Act to reduce carbon emissions from the nation's power plants.  Designed to reduce carbon emissions 30 percent below 2005 levels by 2030, EPA's proposal would impose limits on each state's rate of carbon emissions per megawatt-hour of electric energy generated.

The Federal Energy Regulatory Commission regulates the transmission and wholesale sales of electricity in interstate commerce, monitors energy markets, and protects the reliability of the high voltage interstate transmission system.  Acting out of concern over the possible impacts of the EPA Clean Power Plan on its regulated sector, on December 9, 2014, the Commission scheduled a series of technical conferences to develop public comment on these issues.

First, the Commission will hold a National Overview technical conference on February 19, 2015, at its Washington, DC headquarters.  Earlier this month, the Commission issued a supplemental notice describing the agenda for the National Overview.  After an introduction by EPA, the Commission expects to discuss:
  • Electric reliability considerations: How will the Clean Power Plan affect electric reliability?  How can the U.S. sustain reliability as states and regions develop their plans to comply with the proposed carbon rule?  How could state, regional, and federal plans for compliance affect grid operations?  What tools are available to identify potential reliability impacts?  How can reliability planning processes and compliance planning efforts  coordinated to address potential issues?  What is the Commission's role in this area?
  • Identifying and addressing infrastructure needs: What potential infrastructure needs may arise from various state or regional compliance approaches?  How can any infrastructure needs met in a timely manner in order to ensure system reliability?  How can relevant planning entities, industry, and states coordinate reliability and infrastructure planning and siting processes with state and/or regional environmental compliance efforts to ensure the adequate and timely development of new infrastructure?  Are additional mechanisms needed to ensure timely development of new infrastructure? Are adaptations to current Commission policies needed to facilitate the infrastructure needed for compliance with the proposed Clean Power Plan?
  • Potential implications for Commission-jurisdictional markets:  How could potential compliance approaches to the proposed Clean Power Plan impact Commission-jurisdictional electric and natural gas markets?  What aspects, if any, of the wholesale and interstate markets would facilitate implementation of state or regional compliance plans?  What tools are available to address market issues as they arise?  What opportunities are available to coordinate compliance approaches with Commission-jurisdictional markets to meet the requirements of the proposed Clean Power Plan rule?
Following the National Overview, the Commission has scheduled three regional conferences in February and March 2015.

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