Review Of EPA Rules’ Impact On Power Grid Are ‘Informal’ Only

WASHINGTON -(Dow Jones)- Electricity regulators have conducted only “informal” assessments to determine whether a string of new environmental rules will force power plants to shut down and weaken the reliability of the power grid, documents released Wednesday suggest.

The documents raise questions about the rules’ collective impact on the electricity grid, as well as the effort made by federal regulators to assess those risks, said Sen. Lisa Murkowski, the Alaska Republican who released the documents.

The documents consist of letters top officials at the Federal Energy Regulatory Commission sent to Murkowski earlier this week.

In one letter, FERC Chairman Jon Wellinghoff said his commission has conducted only an “informal assessment of the reliability impacts” and that the assessment “is inadequate to use as a basis for decision-making.”

That assessment conducted by FERC found that 40 gigawatts of coal-fired generating capacity were “likely” to retire, while another 41 gigawatts were “very likely” to retire. Murkowski said that represents 8% of installed capacity for electric generation.

Questions concerning the future strength of the U.S. power grid have surfaced in recent months, as the Environmental Protection Agency develops several rules to curtail air pollution from coal-fired power plants. Among the rules are measures to reduce greenhouse gas emissions and ozone, and to lower the risks from coal ash.

Critics say the rules will force coal-fired power plants to shut down, thereby draining electricity from the grid and threatening its smooth operation.

EPA representatives did not return requests for comment.

Wellinghoff said in a statement Wednesday that “FERC has and will continue to do its job to ensure the reliability of the nation’s transmission grid.”

In another letter to Murkowski, also released Wednesday, Commissioner Marc Spitzer said the EPA and FERC should work together in a more formal way to “ensure that the EPA will not enforce its rules in a vacuum.”

Spitzer did not say whether he believed the EPA’s rules would harm the power grid, but he said it would be unfair to force power companies to choose between complying with environmental rules and taking steps that threaten electricity supplies.

Wellinghoff said his commission was unable to do a more thorough analysis of the EPA’s rules, in part because the EPA has not yet finalized the details of many rules.

Murkowski said FERC should be given time to look at the impacts of the EPA’s rules.

-By Tennille Tracy, Dow Jones Newswires; 202-862-6619; tennille.tracy@dowjones.com

(END) Dow Jones Newswires

08-03-11 1701ET

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