By Institute for Energy Research ——Bio and Archives--February 26, 2015
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Over EPA’s long history of developing Clean Air Act pollution standards for the electric power sector, including the proposed Clean Power Plan, the agency has consistently treated electric system reliability as absolutely critical. Because of this attention, at no time in the more than 40 years that EPA has been implementing the Clean Air Act has compliance with air pollution standards resulted in reliability problems.For sake of argument, let’s assume this is all true. But this argument does not help EPA. That’s because, for the first time in more than 40 years, EPA is regulating carbon dioxide emissions. The goal of EPA’s pollution regulations for the last 40 years was to eliminate all emissions from power plants that weren’t water vapor or carbon dioxide.[1] That’s because water vapor and carbon dioxide are the unavoidable byproducts of combustion, which is the process that provides over two-thirds of our electricity in the U.S. That’s why EPA’s regulations for existing power plants creates four buildings blocks—three of which EPA does not even have the authority to enforce on the states because the regulation of carbon dioxide is so different from what EPA has ever done.
[P]eople recognize that NERC put out some concerns. Those concerns were not really based on a very in-depth and final, if you want, quantitative analysis of how this will play out, because you can’t. And I think our report is in the same vein. We also have not based it on some kind of exhaustive quantitative modeling of the future since we don’t know it, but we propose alternatives, and so people are appreciative of having alternatives out there that NERC can and perhaps should consider as it moves forward in its own analysis.EPA claims that the “Authors [of the Brattle Report] concluded that the plan’s critics haven’t fully addressed the options that utilities and grid operators have to achieve EPA’s carbon emissions reduction goals without causing blackouts.” But EPA omitted the fact that the Brattle Group itself hasn’t fully addressed these same options. Furthermore, Weiss admits that EPA’s existing source rule could impact grid reliability depending on the actions taken by the states. As Weiss explains:
What [NERC] seem[s] to be a little more worried about is what states will ultimately do in their state implementation plans and whether they will make full use of those tools, whether they’re, you know, operational tools or technology tools or the flexibility tools we talked about, like regional cooperation, or whether we’ll pick a solution or strategy to comply that actually narrows their choices in ways that, then, could impact reliability.One serious issue with regional cooperation is anything that would be binding between states would require an interstate compact and the Constitution requires interstate compacts to be approved by Congress. It is unlikely states will have the time to hammer out interstate compacts or for Congress to approve them. Therefore, regional cooperation would have to be voluntary and nonbinding. The Brattle Report does not provide much support for EPA’s argument that reliability will not be threatened by EPA’s proposed regulation. In fact, Weiss raises the issue that states need to do a lot in order to avoid grid reliability problems, and this is a tall order for the states to accomplish with limited time—especially because the changes will drive up electricity rates.
Clean Power Plan is fundamentally different from the Mercury and Air Toxics Standard (MATS) and is well-suited to utilize such flexible and market-based approaches. Experience has shown that such approaches allow for seamless, reliable implementation of emissions-reduction targets. In its final rule, EPA should clarify acceptable or standard market-based mechanisms that could be used to accomplish both cost and reliability goals. Moreover, EPA has stated repeatedly that it will write a final rule that reflects the importance of a reliable grid and provides the appropriate flexibility. We support such adjustments in EPA’s final rule as needed to ensure both emissions reductions and electricity reliability. [emphasis added]In other words, the Analysis Group has concerns that EPA’s proposed rule isn’t sufficiently clear to allow enough flexibility to actually protect grid reliability. Otherwise, “such adjustment in EPA’s rule” would not be necessary. Is EPA dangerously ignorant of the electric grid (or just good at committing logical fallacies)? After citing three studies that don’t support its position, EPA goes into ad hominem attack mode, shooting the messenger so it doesn’t have to deal with the message. EPA opines:
As with anything EPA does, a handful of special-interest critics are automatically opposed. They claim the Clean Power Plan will threaten reliability because they benefit from maintaining the status quo. In fact, failing to take steps to modernize our electric grid is the costliest thing we could do.EPA provides no evidence that its critics aren’t concerned about safeguarding grid reliability. But beside the ad hominem,Conclusion EPA’s blog post should make people more concerned about grid reliability. EPA took the time to try to argue that they are working to safeguard the reliability of the electric grid and failed. They cite three studies, but in each case the studies do not support EPA’s position. In the words of the DOE, their study is “not based on any real or proposed policy.” So it’s hard to claim, as EPA did that the study “predicts the power sector would maintain reliability under the Clean Power Plan” because it didn’t study that plan. The Brattle Group’s study admits that the EPA rule could impact grid reliability depending on the actions taken by the states, and the Analysis Group study explains that, at the very least, EPA’s regulation is not explicitly flexible enough to “ensure both emissions reductions and electricity reliability.” EPA should withdraw the rule in the name of electricity reliability. If EPA cannot identify studies which explicitly show the rule will safeguard the reliability of the electric grid, then Americans are wise to be concerned. [1] Another reliability-threatening rule from EPA, the Mercury and Air Toxics Standard (MATS), is responsible for shuttering the bulk of the 54 GW of coal-fired generation that will come offline before the Existing Source Rule takes effect. The trouble with claiming success on MATS is that the deadline is in April—EPA is celebrating a milestone it has yet to reach. [2] DOE explains on page v, “The purpose of this study is to understand the potential infrastructure needs of the U.S. interstate natural gas pipeline transmission system under several future natural gas demand scenarios. Specifically, three scenarios were developed: a reference scenario and two scenarios with increased electric sector natural gas demand. Both increased demand scenarios—an Intermediate Demand Case and a High Demand Case—are based on a simple, illustrative national carbon policy applied to the electric power sector (not based on any real or proposed policy) that drives increased electric sector natural gas use. The Intermediate and High Demand Cases differ only in their underlying assumptions about coal-fired power plant retirements. In particular, the High Demand Case, which assumes greater coal-fired power plant retirements, is intended to be an upper-bound test case on natural gas consumption in the electric power sector.”
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