Many unknowns remain as NERC gauges impact of EPA CO2 plan

The North American Electric Reliability Corp. (NERC) expects to issue an updated forecast this spring on what impact the Environmental Protection Agency (EPA) Clean Power Plan might have on reliability.

It’s a tough task given that NERC must make its assessment while many details remain unknown about the EPA proposal to have states cut electric sector carbon dioxide (CO2) 30% by 2030, NERC Vice President and Director Thomas Burgess said Jan. 22.

Burgess, who deals with reliability assessment and performance analysis at NERC, made his remarks during a presentation in Washington, D.C., at the National Press Club that was sponsored by ICF Consulting.

NERC had issued an initial assessment on the Clean Power Plan last fall. An updated version could be released to the public in March, Burgess said. But even this updated report will be based on the limited because neither the final EPA rule nor any of the state implementation plans have been issued yet, Burgess said.

EPA should issue the final version of the rule proposal this summer, Burgess said. Filing of state implementation plans is supposed to begin in 2016. If states decide to participate in a regulation CO2 control effort, plans for those entities would be filed a couple of years after state plans are due.

In addition, it remains to be seen how the EPA Clean Power Plan for existing sources of CO2 from the power sector will interact with a companion EPA proposal on CO2 emission limits for new power plants, Burgess said.

“We expect that we will see coal retirements accelerate,” Burgess said. The “massive shift in the resource mix” will also quicken the pace of new natural gas and renewable energy deployment, Burgess said.

The NERC region is already on track to see between 70 GW and 80 GW of coal-fired generation retirements connected with the EPA mercury air toxic standards (MATS), Burgess said.

The EPA Clean Power Plan is a very complex document Burgess said. There are a number of assumptions baked into the plan that will affect the amount of necessary CO2 reduction by states.

For example, rather than predicting a small year-over-year growth in electricity demand, the EPA is projecting that demand will fall through energy efficiency measures, Burgess said. Or if generators fail to meet power plant heat rate goals it would further change the CO2 numbers, Burgess said.

Burgess stressed that NERC is merely doing a forecast on reliability on the EPA rule proposal. It is not taking a position on carbon dioxide policy. He also noted that NERC did not file comments on the EPA Clean Power Plan.

“Maybe by the end of 2015 we will have more information and we will be able to do a better job” on predicting the impact of the rule,” Burgess said.

According to its website, NERC’s mission is to assure the reliability of the bulk power system in North American. NERC also develops and enforce reliability standards.

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.