APPA chief calls EPA CO2 plan ‘simply unworkable’

American Public Power Association (APPA) President and CEO Susan Kelly told the Federal Energy Regulatory Commission (FERC) Feb. 19 that reducing greenhouse gas (GHG) is important but the current proposal from the Environmental Protection Agency (EPA) as currently drafted is not ready for prime time.

Kelly delivered testimony on behalf APPA during a FERC technical conference on the EPA Clean Power Plan. The plan issued under section 111(d) of the Clean Air Act calls upon states to draft implementation plans to cut power sector carbon dioxide (CO2) 30% by 2030.

“APPA agrees that such emissions should be reduced, but believes that EPA’s proposed rule aims to do too much too quickly and is simply unworkable,” Kelly said in her prepared testimony.

APPA’s Kelly revisited many of the positions that her organization has cited about the EPA CO2 plan previously.

“APPA prefers congressional action to address climate change. However, in the absence of legislation, APPA wants to work with EPA to address the substantial problems with its proposed rule,” Kelly said.

“For example, the proposal’s building blocks are unworkable, and few states will be able to meet the required interim emissions reductions by 2020. States (and public power utilities) need a longer glide path,” Kelly said.

The APPA chief said the proposal does not give sufficient time to develop their compliance plans. “This problem is exacerbated if states want to develop multi-state or regional compliance plans or if a state must rely on one or more Regional Transmission Organizations (RTOs) to dispatch all or part of the state’s generation fleet,” Kelly said.

Kelly urged FERC to support the North American Electric Reliability Corporation’s (NERC) ongoing analysis of EPA’s proposal and any recommendations that NERC may offer in its report due later this spring. More time is needed to analyze if regional reserve margins will shrink, Kelly said.

The APPA also wants inclusion of a “reliability safety valve” in the final rule.

In the past, APPA has said that the EPA CO2 plan does not properly credit new nuclear power. The APPA chief also said that the proposal threatens to make the nation too dependent on natural gas.

The proposal does not leave adequate time to allow for construction of natural gas pipelines and related gas infrastructure, she said. In addition the proposal is “overly optimistic” about the availability and price of natural gas supply.

In addition, there is inadequate time to build electric transmission to support the modified generation grid, Kelly said.

The realignment of generation resources may even reverse the flow of electricity on a transmission network. These reverse flows must be studied so they can be anticipated and managed, Kelly said.

“An example of reverse flows is highlighted in a study the Brattle Group conducted for Salt River Project in Arizona. This study evaluates the challenges of new flows on the Western Interconnection that would occur due to the loss of fossil-fired generation in Arizona,” Kelly said.

“It illustrates the problems with EPA’s assumptions about the availability of transmission capacity to provide other lower or non-emitting resources from the Northwest and California to Arizona to compensate for this lost generation during periods of peak demand,” Kelly said in her prepared testimony.

As for gas pipelines, a 2014 ICF International study “shows that most of the oil and gas pipeline investments made in the last four years were made to move the upstream production of natural gas to gas processing centers or oil to refineries,” Kelly said.

“Very little pipeline capacity has been built to address power generators’ current or future demand for natural gas. This issue has already become acute in New England, as the Commission knows,” Kelly said.

APPA represents more than 2,000 public power utilities provide over 15% of all kilowatt-hour sales of electricity to consumers and do business in every state except Hawaii.

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.