A bill that aims to protect electric generators from conflicting laws drew support as well as concerns at a May 9 hearing.
While FERC commissioners expressed support for the concept behind a bill that amends the Federal Power Act, others in the administration voiced concern.
The bill, H.R. 4273, the “Resolving Environmental and Grid Reliability Conflicts Act of 2012,” amends Section 202(c) of the Federal Power Act to clarify that when an electric generator is operating under a Section 202(c) emergency directive to generate or transmit electricity, it will not be considered in violation of environmental laws or regulations, or subject to civil or criminal liability or citizen lawsuits as a result of its actions to comply with the federal emergency order.
A May 7 memorandum by the U.S. House of Representatives Committee on Energy and Commerce, which held the hearing on May 9, also noted that the bill, introduced in late March, directs the U.S. Department of Energy (DOE) to work to minimize adverse environmental impacts in emergency orders issued under Section 202(c) of the Federal Power Act. Among other things, the bill clarifies that the term “environmental law” does not include laws and regulations under the Occupational Safety and Health Act of 1970.
In testimony before the Committee on Energy and Commerce, Subcommittee on Energy and Power, FERC Commissioner Philip Moeller said he and his FERC colleagues support the concept behind the bill in that they agree that electricity generators should not be put in a position of having to choose whether to violate Section 202(c) of the Federal Power Act or to violate the Clean Air Act when certain generating facilities are needed for crucial electric reliability needs.
To ensure that the bulk power grid continues to be reliable, Section 202(c) allows the federal government to require a power plant to run in certain circumstances, even if the power plant’s owner would rather not run the plant. Ideally, Moeller added, it is hoped that Section 202(c) will never need to be invoked, but experience indicates that orders under that section are sometimes needed.
Yet, the very operation of a power plant in compliance with a Section 202(c) order can result in violation of the Clean Air Act. “The law should not require citizens to violate the law,” he added.
FERC is working to formulate a role in advising the Environmental Protection Agency (EPA) on the reliability impacts of retiring or retrofitting various power plants in compliance with EPA regulations. Regardless of how well FERC and EPA can coordinate their efforts, a bill like H.R. 4273 is essential to address potential reliability challenges, Moeller added.
In his opening statement, Energy and Power Subcommitee Chairman Rep. Ed Whitfield (R-Ky.) said: “It is essential that we amend the Federal Power Act so that generators aren’t forced to choose between compliance with an emergency order and compliance with EPA regulations. Otherwise utilities are unacceptably forced between a rock and hard place of federal authority.”
Energy and Commerce Committee Chairman Rep. Fred Upton (R-Mich.) said in his opening statement that the bill is a critical piece of legislation, noting that the government cannot have it both ways.
“It cannot direct a generator to operate for emergency purposes and then turn around and fine them for doing so,” he said. “It’s like having one police officer telling you to speed up, while another sits at the end of the street to give you a ticket.”
Concerns with proposed bill also raised
Regina McCarthy, EPA’s assistant administrator of air and radiation, said in her opening statement that the administration does not yet have a position on the bill but added that the bill could have the unintended consequence of creating problems that would not otherwise exist. For example, it could remove incentives to take timely actions needed to avoid or minimize conflicts between electric reliability and compliance with environmental laws. She also said the bill could unnecessarily endanger public health.
If enacted, the legislation would shield a generation owner from any liability for violations of environmental laws or regulations resulting from operation to comply with a Section 202(c) order, without any regard to whether the owner could have taken or did take actions to timely comply with the relevant environmental requirements and/or to mitigate the relevant reliability concern.
McCarthy also said the bill increases the likelihood that facilities will operate in violation of environmental regulations, with resulting excess emissions of mercury and other air toxics, as well as pollutants that cause smog or fine particle pollution.
Among other things, McCarthy noted that a Section 202(c) order is a tool of last resort, adding that the provision has rarely been invoked and it has virtually never implicated any conflict with environmental compliance because generation owners, grid planners and operators as well as state and federal regulators have a strong record of identifying and addressing potential reliability issues before any such conflict arises.
Similarly, Patricia Hoffman, assistant secretary of DOE’s Office of Electricity Delivery and Energy Reliability, raised concerns. She noted that as proposed, the amendment to Section 202(c) could potentially create a disincentive for some electricity generators to use the options for compliance that EPA has provided.
DOE’s 202(c) emergency authority is one of last resort and should not be viewed as an alternative to working with EPA on achieving environmental compliance and, if need be, with grid operators on any potential reliability issues, she said.