Murkowski: EPA rules could threaten power reliability

Murkowski pointed to an informal analysis by the Federal Energy Regulatory Commission that estimates that 40 gigawatts of coal-fired generating capacity are “likely” to be retired and 41 gigawatts are “very likely” to be retired, due in part to EPA regulations.

FERC Chairman Jon Wellinghoff delivered the analysis to Murkowski as part of the lawmaker’s ongoing investigation on the effect of EPA rules on grid reliability. In a May 17 letter, Murkowski requested that Wellinghoff outline the commission’s efforts to better understand the effects of EPA regulations on power reliability.

She specifically raised concerns about EPA’s climate regulations for power plants and refineries, as well as pending ozone standards and rules for cross-state air pollution, among others.

Wellinghoff, in an Aug. 1 response released publicly Wednesday, said FERC staff has conducted the “informal assessment of the reliability impacts of the proposed rules.” But he stressed that the commission does not have enough information to conduct a full-scale review.

Most of the regulations Murkowski cited are not yet finalized, and any assessment consequently requires FERC to make major assumptions about their potential consequences, Wellinghoff said. He added that the commission lacks “complete information” about potential generation-retirement decisions.

“Therefore, this informal assessment offered only a preliminary look at how coal-fired generating units could be impacted by EPA rules, and is inadequate to use as a basis for decision­making, given that it used information and assumptions that have changed,” Wellinghoff said.

He stressed that “an in-depth analysis could not be conducted because complete information was not available” and added that many EPA regulations have been altered since the analysis was completed.

Murkowski, in a statement Wednesday, nonetheless raised concerns about the potential for coal-fired power plants to retire. “[A] retirement at that scale could have drastic consequences for many parts of our country,” she said.

Murkowski also criticized FERC for not moving forward with a full analysis.

“Equally concerning is FERC’s admission that it has not completed a full reliability study — only an informal, preliminary analysis,” she said. “There is no indication that FERC plans to press ahead and complete such a study.”

More broadly, Murkowski said FERC should be given the time to weigh in on the reliability effects of EPA regulations.

“I continue to believe that FERC is in a good position to provide the information needed to answer these questions, but it’s highly unlikely that it could be possible under the timeframe EPA has established for its regulations,” she said. “We must ensure that FERC is able to weigh in on any reliability concerns that arise, and we must be sure that the information in these letters and anything else that emerges can be made a part of the record on EPA’s rulemakings.”

In his letter, Wellinghoff pointed to a June 2011 Bipartisan Policy Center analysis that states that pending EPA rules are unlikely to affect electric reliability. Here's more on that report.

The BPC study offered a different conclusion than one released in October 2010 by the North American Electric Reliability Corporation.

NERC said EPA regulations could have a “significant impact” on electric grid reliability by forcing the closure of many power plants. EPA, at the time, criticized the report.

“By NERC’s own admission, its projections about electricity supply impacts rest on its own fortune-telling about future regulations that have not even been proposed yet,” EPA said in a statement.

In a statement Wednesday, EPA spokesman Brendan Gilfillan defended EPA's regulations:

"EPA has taken a series of steps under the Clean Air Act that will save tens of thousands of lives and prevent hundreds of thousands of heart and asthma attacks each year by slashing harmful emissions of pollutants like mercury, smog and particulate matter. EPA has worked with FERC since we began developing these standards to ensure we maximize public health benefits while minimizing costs, including assessing any impacts they would have on electric reliability and affordability. Our comprehensive analysis indicates that the standards - which rely on pollution control technologies already in use at facilities across the country - would have minimal impact on reliability or affordability nationally."

This story was updated at 6:25 p.m.