EPA and FERC to model impact of regulations on energy reliability

WSJ Editorial on EPA Regulations
November 23, 2010
PACE Takes Energy Fairness Fight to National Journal
February 8, 2011
Today, Energy Washington Week reported that the U.S. Environmental Protection Agency (EPA) will be working with the Federal Energy Regulatory Commission (FERC) to model “the potential for coal-fired power plant closures prompted by pending EPA climate, water, and other rules.” According to the FERC chairman, the modeling “could provide vital new data to help in planning a strategy for addressing any generating capacity loss resulting from plant closures.”
With the EPA in the process of implementing regulations on power plants, petroleum refiners, and other “stationary sources” of pollutants, as determined by the EPA, the news of the modeling is good. It is critical that we take a close look at how these regulations will impact the reliability of our energy grid, not to mention the economy – especially since so many of our nation’s power production facilities have already taken major (and costly) steps to reduce their emissions on their own. As unemployment rates remain high across the country – especially in coal-dependent states – and electricity rates remain high, the last thing we should do is threaten our nation’s most abundant and affordable source of energy with onerous, unnecessary regulations.
We’ve already seen quite a bit of data on the impact of the regulations on the reliability of the grid. The North American Electric Reliability Corporation, a federal agency advisory body, determined in October that the EPA’s regulations would cause the United States to lose approximately 7 percent of its current energy capacity. The majority of this capacity would be lost from coal, which supplies about half of our nation’s power. Similarly, The Brattle Group found late last year that the regulations will cause us to lose 50,000 MW of coal capacity, and require the remaining plants to invest $180 billion in order to comply (again, even though many of them already are taking steps on their own to be more environmentally friendly).
I’m glad to see that the EPA and FERC will be undergoing their own study on the effect of the regulations on reliability. Before these regulations go into effect, it is critical that we are certain of how they will impact Americans’ access to reliable electricity – not to mention their jobs and their bank accounts.