NERC provides warning, advice to states on Clean Power Plan compliance

With states considering implementation plans for the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP), NERC issued a Jan. 27 report that gives advice on reliability issues to consider and traps to avoid.

In that latter category, states should not plan on using the “reliability safety valve” as a planning tool to address generation changes in order to comply with the EPA final rule, Thomas Coleman, NERC’s director of reliability assessments, said in a Jan. 27 conference call with reporters.

Because the safety valve is only for use in response to triggering events or emergency conditions under the final rule, it “cannot be used as a planning tool” to allow generation units to deviate from the state compliance plan, Coleman said.

The safety valve provision, which was added to the final rule at the request of power industry companies and others concerned about the reliability implications of the CPP, allows a 90-day period for a generating unit to meet a different emission standard other than the standard set in the state plan, though cooperative utilities have complained to EPA that it is not clear what type of triggering event is needed for the provision to be used.

States also should allow sufficient time for infrastructure additions such as gas pipelines and transmission lines to be developed to address retirements of coal-fired generation, new gas-fired generation and other resource changes, Coleman said during the call. A pipeline can take up to three years to be built and a transmission line can take anywhere from eight to 15 years to be added, so states need to take such issues into account when developing their CPP compliance plans, he said.

Generation retirements “can happen quickly, but adequate replacement facilities must be in service prior to retirement,” NERC said in the report.

State officials working on CPP implementation plans “should work with stakeholders in their respective states to understand how components of their implementation plans may need to be adjusted to support continued [bulk power system] reliability, the need and timing requirements for any additional energy infrastructure and how these items relate to compliance timelines,” NERC said.

EPA has encouraged states to collaborate with grid planning entities, independent system operators, utilities and others as they put CPP implementation plans together, but to make such coordination effective, all parties must understand state or regional reliability objectives and identify “pathways that accommodate resources call for in CPP implementation plans, according to the report. Many neighboring states import and export power, and the interconnected system “requires that NERC Planning Coordinators and Transmission Planners coordinate system planning and, therefore, these entities are an essential component to the development of state plans,” NERC said.

During the call, Coleman said that NERC staff is available to states as they work on implementation plans, and that NERC plans to be engaged with state regulators leading up to states submitting those plans to EPA.

The first deadline for states to submit their plans to EPA is next September, though EPA has said that states could seek additional time and try to extend that deadline to September 2018, and some states may join neighboring states and submit regional compliance plans.

Numerous states and other entities are challenging the CPP in court, seeking to have the final rule struck down.

A regional compliance plan, obviously, would require much more coordination compared with a single-state plan, said Coleman.

He said NERC expects to see a lot of states seeking to extend their deadline for filing plans with EPA to September 2018.

NERC is working on another analysis of the CPP, which will be released at the end of the third quarter, Coleman said. That analysis will show a base case of reliability implications from the CPP and other scenarios, such as the potential for more retirement of nuclear facilities, he said during the call.

He emphasized a point made in a recent NERC report on “essential reliability services,” that new generation resources must provide adequate levels of frequency support, ramping capability and voltage control to maintain reliability of the bulk electric system. That report, from NERC’s essential reliability services task force, was prepared to help the power industry address the increased use of renewable resources, the retirement of conventional generation units and advances in distributed energy resources.

Because the power grid is undergoing a transformation in the generation mix, with more renewables and natural gas-fired resources, it is important for state environmental and energy regulators to understand the reliability implications of that transformation as they craft CPP implementation plans, Coleman said.

NERC has seen coal-fired generation units used differently than in the past, with more cycling and use as peaking units, which could affect reliability if those changes are not accounted for in state implementation plans, Coleman said.

In a previous report on the CPP, NERC noted that energy efficiency plans can serve as a bridge to when a state’s resource mix is in compliance with the emission requirements of the rule, but it will be important for states to understand exactly how much of an efficiency gain can be counted on, Coleman said.

“Will it show up and can it be relied on as a resource,” are questions that states need to consider regarding energy efficiency, Coleman said, adding that methodologies for evaluating, measuring and valuing efficiency should be in place for states targeting energy efficiency gains as a CPP compliance mechanism.

Similarly, if a robust emission trading market develops beyond what is in place today, it will be easier for some states to comply with the EPA plan, but it will be important for states to know how much trading can be counted on as they develop implementation plans, Coleman said.

The recommendations in the report and related analysis of the CPP, “provide a technical and policy basis for system planners, operators, and policy makers to understand reliability trends, future emerging reliability issues and the need for coordination among the electric industry, regulators and policy makers,” NERC said in a Jan. 27 statement.