The Republican majority on the House Energy and Commerce Committee got busy March 28, announcing both a letter to the U.S. Department of Energy about grid reliability in the face of new U.S. Environmental Protection Agency air rules, and introduced a new bill to give DOE more power over grid reliability.
Energy and Commerce Committee Chairman Fred Upton, R-Mich., Chairman Emeritus Joe Barton, R-Tex., and Energy and Power Subcommittee Chairman Ed Whitfield, R-Ky., wrote to Energy Secretary Steven Chu on March 28 requesting detailed information about how EPA’s regulations could affect electricity prices and the reliability of the nation’s electricity supply.
During a recent hearing, Chu indicated that DOE had provided technical information to EPA about how EPA’s Utility Maximum Achievable Control Technology (MACT) rule, also known as the Mercury and Air Toxics Standards (MATS), would affect grid reliability. Committee members are seeking access to the reliability information DOE provided to EPA and also requested additional information concerning the role DOE has played in the development of EPA’s power sector rules. Chu’s testimony to the committee suggests that DOE’s role in the development of EPA’s rules has been very limited despite significant concerns about the potential reliability impacts of the rules, the committee members said.
“Members are concerned that President Obama’s administration is moving forward with its aggressive regulatory agenda without fully assessing how new environmental rules may affect our nation’s power supply and the economy,” said a March 28 statement from the committee majority. “Yesterday, EPA released a new proposed rule establishing greenhouse gas standards for power plants, yet it remains unclear how these new standards, taken together with other EPA power sector rules, will impact electric reliability and electricity prices.”
EPA’s Utility MACT rule is so expensive it is accelerating the retirement of the nation’s existing coal fleet, the committee members wrote. Additionally, both the Utility MACT rule and the March 27 proposed rule for new utility greenhouse gas standards are so stringent that either rule will effectively prohibit any new coal-fired power plants from being built, they added.
Bill would give power companies a break on penalties
Also on March 28, House Energy and Commerce members including Pete Olson, R-Tex., and Adam Kinzinger, R-Ill., introduced the Resolving Environmental and Grid Reliability Conflicts Act, also known as H.R. 4273. The bill is designed to ensure America’s power companies are able to comply with DOE emergency orders to maintain grid reliability without facing penalties for violating potentially conflicting environmental laws. The Federal Power Act authorizes DOE to order electric generating facilities to continue operating in order to avoid potential emergencies, including reliability-related emergencies.
“However, compliance with such an emergency order could trigger a violation of environmental laws and regulations, potentially exposing the generator to penalties and lawsuits,” said a statement from the bill sponsors. “In 2005, Mirant (now GenOn) faced this dilemma when DOE ordered its Potomac River Generating Station to operate to protect the electric supply to Washington, DC. Mirant complied with the order but was later fined for a three hour NAAQS violation. Such conflicting legal mandates threaten the reliability of the grid and place power plant operators in the difficult position of having to choose compliance with one law over another.”
Within the next few years, DOE may be forced to rely on its emergency authority more often to avoid potential blackouts, resulting in greater occurrences of conflicts between emergency directives and environmental laws, the sponsors pointed out. Absent legislative action, utility companies could be caught in a “crossfire” during times of an electric grid emergency, they said.
“This common sense legislation will give peace of mind to all Americans facing the potential of rolling blackouts during the hot summer months,” Olson said. “The Electric Reliability Council of Texas (ERCOT) has already warned of rolling blackouts. Electricity providers asked to provide power during an emergency should no longer have to worry about being slapped with lawsuits and heavy fines. More importantly, no one should face a loss of power due to conflicting federal laws.”
“This legislation ensures that power utilities are able to run in an emergency situation without being penalized by the EPA or sued by a third party,” said Kinzinger. “This eliminates the issue that occurs when two government agencies give contradictory orders to a power utility and will instead provide a clearer, more expedited path to restore power during blackout periods.”