FERC’s impact on EPA’s CO2 plan remains unclear, official says

Given that the Environmental Protection Agency (EPA) and the Federal Energy Regulatory Commission (FERC) are separate entities, it’s far from clear how much sway that the commission might have over EPA’s Clean Power Plan, according to an energy policy advisor who spent 30 years on the FERC staff.

Wilbur “Bud” Earley, a non-lawyer member of the Covington & Burling LLP energy practice, discussed the issue in a March 3 analysis in the National Law Review..

Last June EPA announced its proposal to have states cut power sector carbon dioxide (CO2) emissions 30% by 2030.

Given the rule’s potential ramifications on electric grid reliability, FERC is holding a series of technical conferences on the issue. Several industry and government stakeholders have “strongly urged FERC to be proactive in helping to shape the CPP,” Earley wrote.

“What remains unclear, however, is precisely how FERC will seek to influence a rulemaking over which the Commission lacks jurisdiction.  In fact, FERC’s holding a conference on another agency’s proposed rule is highly unusual,” Earley said.

FERC Chairman Cheryl LaFleur had noted that FERC has a central role to play on infrastructure, markets, and markets and being an honest broker for discussion of issues. LaFleur has made such comments in an address at the National Press Club in Washington, D.C., and other forums.

With respect to infrastructure, Chairman LaFleur notes that additions to both natural gas and electricity infrastructure will be needed.  FERC has permitting authority over the additional  pipeline capacity needed for the new gas-fired generators likely to be added.  And FERC is responsible for planning and setting rates for interstate transmission lines likely to be needed to connect remote solar and wind generation resources to the grid.

With respect to markets, FERC will need to adapt the current wholesale electricity markets to individual states’ plans for implementing the Clean Power Plan “while still delivering the benefits of competition,” Earley said.

Earley noted that FERC will undergo a leadership change in April. LaFleur’s chairmanship of FERC is scheduled to end in mid-April.  Current FERC Commissioner Norman Bay is to become chairman on April 15.

Earley served for over 30 years in various staff positions at FERC. While at the FERC, Earley was instrumental in developing and applying policies regarding the transition of the electric utility industry to competition, including policies regarding independent power producers, transmission access, standard generator interconnection procedures, organized electricity markets, mergers and market-based rates.

Formed in 1919, Covington & Burling today has  more than 850 lawyers in ten offices.

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.