[EPA's Clean Power Plan] has the potential to comprehensively reorder the jurisdictional relationship between the federal government and states as it relates to the regulation of public utilities and energy development. . . . .[States] will have entered a comprehensive “mother-may-I?” relationship with the EPA that has never before existed. – FERC Commissioner Tony Clark
Five Commissioners of the Federal Energy Regulatory Commission (FERC) testified today on EPA’s Clean Power Plan before the House Energy and Commerce Subcommittee on Energy and Power.
EPA’s Clean Power Plan establishes carbon dioxide (CO2) emission reduction targets for the electric power sectors of 49 states. The Plan outlines four “building block” strategies states are likely use to meet their respective targets: (1) improve the efficiency of coal power plants, (2) shift base load generation from coal to natural gas, (3) shift electric generation from fossil fuels to renewables and nuclear, and (4) reduce electricity consumption through demand-side management (DSM) programs.
In his briefing memo, Subcommittee Chairman Ed Whitfield (R-Ky.) asserts that EPA’s proposed rule “would require significant changes to the way electricity is generated, transmitted, and consumed in States across the country.” Two witnesses spoke directly to that point.
FERC Commissioner Philip D. Moeller described the fundamental change contemplated by the Clean Power Plan as a switch from “economic dispatch” to “environmental dispatch”:
For decades we have relied on the concept of “economic dispatch” of electric generation. Simply put, the power plants with the lowest operating cost are called first to generate electricity — with various reliability requirements and other factors as part of the decision, depending on the structure of various markets. By moving to what is essentially “environmental dispatch,” units will be called to generate primarily based upon the emission profile of the unit.
It is hard to imagine how giving low-carbon generation priority over low-cost generation would not increase electric rates. It is also not hard to imagine how pushing renewables higher in the “merit order of dispatch” could complicate the task of balancing loads and ensuring grid reliability.
Commissioner Tony Clark views the basic change in political terms. The Clean Power Plan replaces cooperative federalism with a hegemonic system in which EPA has final say on how states generate, transmit, and consume electricity: [click to continue…]