EPA’s Proposed Rule Raising Reliability Fears

With the comment deadline approaching for the Administration’s Clean Power Plan (CPP) rule, it is becoming clearer the complex web of mandates and deadlines included in the CPP could pose daunting problems for utilities, state governments, and electricity consumers.

The CPP’s goal is to reduce U.S. CO2 emissions from the power sector 30% below 2005 levels by 2030 (despite the fact that Administration officials have admitted repeatedly that these unilateral reductions will not deliver meaningful changes in temperatures, sea levels, or similar climate change metrics). To accomplish this task, the CPP requires that the states develop and implement a wide range of EPA-approved regulatory and legislative changes to the way that electricity is generated and consumed in their jurisdictions.

EPA intends to finalize the proposed rule in June 2015. Absent an extension, states must submit their plans to comply with new rule by June 2016, which most states – even those that support the rules – say is too short of fuse given the breadth of changes that will be required by the CPP.  In fact, states with abbreviated legislative calendars might be put in the position of completely re-organizing their electricity sectors and passing new legislation in a matter of weeks—a prospect that can only be bad for the electricity grid and for electricity consumers.

The timing of the CPP raises more than just political and process concerns, however.    Just last week, the Texas grid experienced rotating outages for the first time since 2011 due to infrastructure challenges; the new EPA rule will only make reliability more precarious.  In fact, a growing number of Independent System Operators/Regional Transmission Organizations (ISOs/RTOs), which coordinate the flow of electricity throughout the grid, are letting EPA know that the CPP may create new and dangerous threats to the reliability of the U.S. electricity supply.

The Southwest Power Pool (SPP), the grid operator for all or part of nine states in the Great Plains, said recently that maintaining a reliable system will be more difficult with EPA’s rule.  SPP said the rule could lead to transmission overloads and even rolling power outages.  SPP explained that building new electricity infrastructure can take years, and that the combination of interim and final targets under the CPP is inconsistent with these realities. Similar concerns have been voiced by the Midcontinent ISO (MISO) and the Public Utility Commission of Texas (PUC), among others.

These sorts of concerns explain why the EPA is being sued by a dozen States and by energy companies in an effort to delay or stop the rule.  When electricity becomes unreliable it is consumers who suffer the most.  Power outages cause millions of dollars in lost productivity every minute and threaten the health and safety of our most vulnerable citizens, who depend on reliable and affordable electricity for their medical equipment and to heat and cool their homes, schools, hospitals, and businesses. These are just some of many structure flaws/issues associated with EPA’s proposed rule, and until practical and/or legal guidance is forthcoming, there is little states can do to address these concerns.

EPA needs to provide States with more time and more guidance.  Not enough is known about the details of how the rule will operate and the costs that will be incurred to meet the EPA’s new mandates.

With the growing chorus of concerns from State and local governments and energy sector experts, EPA needs to fundamentally rethink its plans for finalizing its CPP.  Good policy can only result from working cooperatively with experts in the States and the energy sector—and this type of work is about more than simply having meetings or listening sessions.  A genuine cooperative endeavor will require meaningful changes to the CPP and a deliberative process that is not constrained by artificial deadlines that have been established to serve political, rather than policy, objectives.


Morning Consult