FERC chair says EPA CO2 plan will affect infrastructure planning

The Environmental Protection Agency (EPA) Clean Power Plan will have a big impact on infrastructure planning Federal Energy Regulatory Commission (FERC) Chairman Cheryl LaFleur told a Washington, D.C. gathering at the National Press Club on Jan. 27.

FERC has had a “steady stream” of comments on how EPA’s plan to have states curb carbon dioxide (CO2) emissions by 30% might affect reliability of the nation’s electric grid, LaFleur said.

FERC has heard a wide variety of viewpoints, from parties “who say that the lights will go out” to those who think the EPA rule didn’t go far enough.

FERC is not an environmental regulator, LaFleur said. Nevertheless, FERC has role to play. This role includes working with infrastructure, markets and being an honest broker for discussion of issues, LaFleur said.

On the “honest broker” role, LaFleur said she believes FERC has done a good job with the reliability implications of the mercury and air toxics standard (MATS) policy from EPA.

FERC will soon start holding several days of hearings on the reliability issues posed by the EPA CO2 plan.

“Reliability, cost and the environment,” are the three chief values that must be balanced in the energy sector, LaFleur said. FERC has become a forum for balancing such issues, “whether they are in our jurisdiction a little bit or a lot,” LaFleur said.

“We work on the unsexy underbelly of every energy issue,” LaFleur said. “Letting the lights go out is not going to be an option,” she said.

The FERC chairman said that EPA’s plan is certain to stimulate more spending on both natural gas and electricity infrastructure, she said.

In addition, the plan is certain to trigger more reliance on natural gas power plants. This includes both existing gas plants and, in all likelihood, new natural gas plants, LaFleur said.

This means construction of both new natural gas pipelines and compressor stations. Pipelines especially have become increasingly controversial issues, LaFleur said.

FERC’s congressional mandate on natural gas calls upon the commission to ensure that new pipelines are needed and can be built safely and in compliance with environmental standards, LaFleur said.

“Our review is project-specific and confined to the information in the docket,” LaFleur said. The nation will have to grapple with increased use of natural gas power generation if it is to meet its goals to decrease power sector CO2 output, she added.

The nation does not want to be “closing down the old stuff, before we can build the new stuff,” LaFleur said.

Meanwhile, electric transmission can also be controversial due to landowner and environmental concerns as well as ratepayer cost concerns, LaFleur said. Increasingly FERC does want transmission builders to take into account state energy policy – including the state implementation plans for CO2 that are called for under the EPA Clean Power Plan, LaFleur said.

Citing her experience as a utility executive, LaFleur said energy efficiency programs can be very effective, “but they are not free,” LaFleur said.

LaFleur was first nominated by President Barack Obama to the Federal Energy Regulatory Commission in 2010 and was confirmed for a second term by the Senate in 2014. She was named acting chairman on Nov. 25, 2013 and chairman on July 30, 2014.

Under a political deal worked out last year, LaFleur will be succeeded as chair by fellow commissioner Norman Bay in a few months. LaFleur, however, will continue as a commissioner until 2019.

Prior to joining the Commission in 2010, Chairman LaFleur had more than 20 years’ experience as a leader in the electric and natural gas industry. She served as executive vice president and acting CEO of National Grid USA.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.