On EPA’s Supposed “Sensitivity” to Electric Reliability

by William Yeatman on June 17, 2014

On Sunday morning’s Platts Energy Week with Bill Loveless, Janet McCabe, acting head of EPA Office of Air and Radiation, told the host that the agency is “very sensitive” to the reliability impact of its rules. All the evidence suggests otherwise.

For starters, consider that EPA Administrator Gina McCarthy recently said that she’s “tired” of hearing about the reliability threats posed by the agency. Of course, it’s improbable that one can be “very sensitive” to an issue one is “tired” of discussing.

Consider as well Commissioner Philip Moeller’s opening remarks during last week’s Federal Energy Regulatory Commission reliability conference, in which he stepped on EPA’s reliability analysis in the course of praising the North American Electric Reliability Council:

[At the 48:15 mark] FERC Commissioner Philip Moeller: The final observation is that I hope you’ll [he is referring to NERC] always keep your independence…we want you to tell it like it is. And I think back to your projections on what the bulk power system—on what would happen with MATS rule (the “the Mercury and Air Toxics Standards,” also known as the “Utility MACT”)—and you took public criticism from the Chairman of this commissions and the administrator of the EPA for essentially predicting exactly what would happen. Losing 67 GW. You were right. You did the right thing. [You] took heat for it, and going forward we’re going to need that sort of honesty and objective analysis.

To summarize Moeller’s remarks: EPA was wrong to criticize NERC’s warning over the ridiculous Utility MACT. At that time, EPA defended itself/offended NERC by pointing to a reliability assessment that the agency had conducted in the course of crafting the pointless, politicized Utility MACT. According to EPA’s analysis of its own rule, there was nothing to worry about, as the regulation would have a negligible impact.

As noted by Commissioner Moeller, events have since discredited the agency’s reliability assessment.

With EPA’s history of undue optimism regarding the reliability impact of its rules in mind, it is disconcerting that the agency is projecting that its just-released climate regulations for existing power plants would adversely affect reliability in three regions of the country. Reports InsideEPA’s John Siciliano ($):

EPA in the resource and reliability analysis concedes that in three regions of the United States the changes caused to the grid by the ESPS could cause at least a 5 percent decrease in their electricity reserves. “The EPA believes changes below 5 percent are unlikely to raise concerns over reliability,” the agency says.

The three regions where EPA’s Integrated Planning Model (IPM) review of the ESPS shows potential reserve impacts above 5 percent that could cause reliability problems are: New England under the control of the New England Independent System Operator; the Southeastern Reliability Corporation states of Georgia, Alabama, part of Mississippi, and the panhandle of Florida overseen by the North American Electric Reliability Corporation (NERC); and the state of Florida comprising its own NERC reliability corporation, known as FRCC.

See for yourself. Below, I’ve reposted EPA’s reliability analysis, according to which three regions–encompassing New England, the deep South, and the Gulf panhandle–will face potential problems keeping the lights on as a consequence of the regulation. In light of EPA’s history of low-balling the impact of its rules, one wonders how much worse is the threat in reality.

TSD Reliability ESPS

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