E2 Morning Roundup: Power report highlights partisan energy divide

Waxman, Upton split on grid study

A study of power grid reliability has sparked the latest battle over Environmental Protection Agency regulations.

A North American Electric Reliability Corp. (NERC) report Tuesday warned that a quartet of planned rules could cut existing U.S. generation capacity by about 7 percent under a worst-case scenario, eating into the cushion needed to meet peak demand.

Rep. Fred Upton (R-Mich.) — who has the pole position to chair the powerful Energy and Commerce Committee if Republicans reclaim the House — said the study “highlights the devastating impact of EPA regulations at a time when our nation can least afford it.”

“The report underscores that we are woefully unprepared to meet our future energy needs — the current administration seems more focused on shutting plants down than fortifying our power needs with American-made energy,” Upton said in a statement to E2 Wire. 

“The dirty little secret EPA has ignored is that by shuttering coal-fired power plants, energy costs will drastically increase and jobs will be lost. The Democratic-controlled Congress has done no oversight of an EPA that is clearly out of touch with the needs of our nation and economy. EPA has not been held accountable — this must change immediately,” Upton added.

Upton’s comments affirm that he’ll have EPA in the crosshairs if he chairs the committee.

Waxman calls report ‘deeply flawed’

Current Energy and Commerce Chairman Henry Waxman (D-Calif.) bashed the study by NERC, an industry-funded group that sets and enforces grid-reliability standards.

“This study was clearly designed to find problems instead of solutions — the same approach industry always takes,” Waxman said in a statement to the publication E&ENews PM.

“Instead of assuming that industry will adopt solutions like improving energy efficiency and building new, clean generation to meet these important public health rules, this deeply flawed study assumes that companies won't act promptly and sensibly to maintain power system reliability,” Waxman added Tuesday.

The report forecasts retirements of plants that run on coal and other fossil fuels and looks at the effects of planned rules governing plants’ intake of cooling water, as well as rules to curb air pollutants like mercury and sulfur dioxide and tougher disposal requirements for wastes from coal-fired plants.

EPA also criticized the report, alleging it presents doom-and-gloom scenarios about rules that are only in the planning stages. “In reality, EPA has some discretion and will be more sensitive to reliability than NERC gives us credit for,” said EPA spokesman Brendan Gilfillan yesterday.

Green group, power industry lobbyists see the ink blots differently

The nonprofit Clean Energy Group quickly noted that cooling water intake rules — not tougher clean-air standards — have the greatest impact under the NERC analysis

“The NERC assessment affirms that the electric power industry can maintain electric system reliability while improving our air quality and protecting public health,” said Michael Bradley, executive director of the Clean Energy Group, which advocates for low-carbon power. 

“The clear message from the report is that EPA’s proposed air rules aimed at curbing hazardous air emissions from power plants will have negligible impacts. Indeed, NERC’s projected retirements from air regulations are significantly lower than others have projected,” he said.

He added that when it comes to the water pollution rules, EPA “should give local and state regulators broad discretion in implementing these rules over a longer time horizon.”

Industry says it's worse than it appears

But Scott Segal, who represents power companies for the lobbying firm Bracewell & Giuliani, said the NERC report underestimates the effect of upcoming air pollution and coal-waste rules.

He said the analysis of clean air rules is too narrow because it looks only at the shuttering of plants for economic reasons.

“They don’t include the impact of plants that will have to shut down (at least for some period of time) because they can’t get controls installed in the short compliance timeframe. The report models natural gas and coal prices as being fixed. This doesn’t account for the likely increase in natural gas prices as much of the retired coal capacity will have to be replaced with natural gas,” he said in a statement e-mailed to reporters.

Segal also noted that the study doesn’t consider upcoming EPA greenhouse gas rules —mandates he said would result in a de facto moratorium on new coal- and gas-fired power plants.

On Tap Wednesday: Oil group assesses EPA rules

The American Petroleum Institute will also turn a critical eye Wednesday toward a range of EPA plans that will affect the industry, including ozone and greenhouse gas rules.

Officials with the oil industry trade group will host a conference call about “a string of new regulations in the coming months that will have a significant impact on all of industry, including the oil and natural gas industry and the 9.2 million jobs we support, as well as the overall economy and America’s energy security.”

On Tap Wednesday II: White House officials share ‘green intelligence’

The second day of The Atlantic magazine’s “Green Intelligence” forum will feature a Q&A with Melody Barnes, who directs the White House Domestic Policy Council. The event will also feature speeches by Michigan Gov. Jennifer Granholm (D) and John Holdren, director of the White House Office of Science and Technology Policy.

Upton is ‘presumed favorite’ for energy chairmanship

Back to Upton for a moment: The Wall Street Journal looks at his chances of taking the Energy and Commerce Committee gavel if Republicans reclaim the House, which many political analysts call likely.

The piece notes the conventional wisdom that Rep. Joe Barton (R-Texas), who is currently the panel’s top Republican, is unlikely to get a waiver for another spin as chairman in the wake his now-infamous apology to BP.

But Upton isn’t without baggage in GOP circles. “His potential liability is his reputation as centrist in an increasingly conservative party,” the Journal piece notes, but adds:

“Of late, he has stuck with his party, voting against the Obama administration's signature initiatives — the economic-stimulus bill, the health-care overhaul and the climate bill. He has been raising funds and campaigning widely for fellow Republicans this fall, and going on the attack against the administration's regulatory agenda.”

“Other Republicans have expressed interest in the energy post — Reps. John Shimkus of Illinois and Cliff Stearns of Florida — but Mr. Upton is the presumed favorite, according to leadership aides.”

Lobbyists measure the drapes for Hastings to lead resources panel

The New York Times checks in on Rep. Doc HastingsRichard (Doc) Norman HastingsCongress just resolved a 20-year debate over Neolithic remains Boehner hires new press secretary GOP plots new course on Endangered Species Act reform MORE’s (R-Wash.) potential chairmanship of the House Natural Resources Committee, noting “excitement among energy-sector lobbyists” about a GOP takeover.

“Even while oil was still spilling into the Gulf of Mexico this summer, Mr. Hastings was condemning the moratorium on new drilling, and tried to block a Democrat-backed bill that would impose new safety standards on off-shore drilling operations, while also increasing taxes that oil drilling companies must pay,” their piece on Wednesday notes.

“Mr. Hastings has long been popular with the oil and gas interests. He got $10,000 from the industries in the last election cycle. But this time around, he has collected $70,000, making him one of the top recipients of money from those industries.”

In case you missed E2 Wire yesterday

Check these Tuesday posts:

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Deputy Interior secretary: More work needed on offshore drilling

Carter: Tea Party backed by anti-green ‘oligarchs’

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