November 7, 2018 - Despite the well-founded sense that the Clean Power Plan (CPP) is long gone, it remains a specter lurking just over the nation’s shoulder. The EPA’s proposed replacement rule, the Affordable Clean Energy rule, is just that, a proposal. Thoughtful, detailed work remains to get this welcome alternative over the finish line and ensure the Costly Power Plan is never implemented.
The EPA continues grapple with CPP’s flaws, the damage it could have done – and could still do – to the reliability of the nation’s bulk power system and the critical areas in which it overstepped the agency’s regulatory authority under the Clean Air Act. It’s under this continued mission of information gathering – of listening to experts and in-the-trenches stakeholders – that Neil Chatterjee, chairman of the Federal Energy Regulatory Commission (FERC), provided smart comments on the dangers and unintended consequences of the CPP.
In his letter to the EPA’s acting administrator Wheeler, Chatterjee explains that his comments "are geared toward offering the Agency the benefit of the information the Commission has gleaned over the past several years when it investigated the Clean Power Plan's effects on the reliability of the bulk power system." Specifically, he points to transcripts from four technical conferences conducted by commission staff with representatives from state utility commissions, regulated entities and a variety of public interest organizations. A summary of some of the information gathered from these technical conferences was relayed to EPA, but the full transcripts from those conferences nor comments submitted to FERC by these expert parties were ever shared.
As the Chairman explains, while those transcripts and comments come from 2015, before EPA issued its final CPP rule, they hold valuable analysis of the potential consequences of implementing the CPP and useful suggestions on how to address a range of concerns. In the Chairman’s estimation, the concerns for grid reliability outlined in those technical conferences and comments have only grown more pronounced in the period since they were originally gathered.
He writes, “I am concerned that significant changes in the power sector have occurred since 2015 that would make the reliability of the nation’s bulk power system even more susceptible to unintended consequences should the Clean Power Plan ultimately be implemented.” He, like DOE and the North American Electric Reliability Corporation (NERC), is clearly concerned by the volume and speed of baseload coal and nuclear retirements. Those retirements have come without the implementation of the CPP and are already showing signs of stressing the grid. Should the CPP ever be implemented, inevitably pushing more of these essential power sources into early retirement, the impact on grid reliability could be devastating.
FERC is currently examining the resilience of the grid in response to concerns raised by DOE and others due to changes in the nation's power mix and the loss of critical fuel-secure, dispatchable baseload generation.
The reliability and the resiliency of the gird are now at a tipping point. Coal plants that play an outsized role in keeping the lights on year-round and homes warm during winter continue to retire, overlooked and ill-compensated by a market that appears incapable of properly valuing their inherent strengths. Out-of-market subsidies for renewable sources of power continue to depress capacity markets; the march towards greater reliance on a power system beholden to just-in-time fuel delivery and intermittent power sources is accelerating.
The sweeping changes to the power system identified in Chairman Chatterjee’s comments to the EPA are concerning on their own. Implementing the CPP would have been fuel to the fire. As the EPA works to craft the right approach to regulating greenhouse gas emissions while preserving the integrity of the grid, revisiting and digging further into the prescient concerns raised by those that know the grid best has never been timelier.