We never thought that there would be a problem with an Obama administration regulatory agency not regulating enough, but that bizarre day has come. The Federal Electric Reliability Commission (FERC), which is charged with ensuring that the nation’s power grid remain operational, is frozen like a deer in the headlights when it comes to a pair of incoming EPA rules that pose a grave threat to reliability.
To repeat: in the one instance when we actually need federal regulators to intervene, the agency in question is failing to do its job. Oh, the irony.
A FERC DIVIDED – It’s not only lobbyists and lawmakers who are arguing over whether EPA regulations pose a threat to the U.S. electric grid. The debate has consumed the Federal Energy Regulatory Commission, the board tasked with ensuring the nation a reliable supply of electricity.
The most outspoken commissioner, Philip Moeller, is pushing for his agency to scrutinize EPA’s proposals more closely, while saying the EPA should consider delaying implementation of some rules for more than a year. But fellow Commissioners Cheryl LaFleur and John Norris argue that delaying the rules might run afoul of the certainty that Moeller is seeking.
MORE ON EPA – New England and large swaths of Texas are at risk of electric power shortages in 10 years in part because of power plant retirements and retrofits needed to meet EPA regulations, according to a report (http://bit.ly/w4cGeF) from the North American Electric Reliability Corp. (which goes by the street name “NERC”). But EPA says NERC has it all wrong, and in a letter (http://politico.pro/vGmK7D) last week, the agency charged that a draft version of the NERC study, like NERC’s 2010 review, “did not accurately portray the EPA’s regulations or the likely outcomes for the electric grid.”
To that end, the Wall Street Journal has more on NERC:
NERC’s forecasts are the gold standard for the U.S. power system because they are built from the bottom up, starting with finely grained data from individual plants. NERC has been doing this work since 1967, and since 2005 it has operated under the FERC umbrella as an “electric reliability organization” similar to Finra, the securities regulator with quasi-governmental duties.
Hmm, who are we going to trust here? The Obama administration agency that is pursuing an ideologically-driven agenda with the stated goal of scuttling the coal industry in its entirety, or the long-trusted industry group that has no reason to fabricate information to fit a specific ideology?
The growing threat to reliability – not to mention jobs and economic revenue the plants slated for shutdown provide – is not exactly news to Lisa Jackson’s EPA. For a year now, utility providers and state officials have been speaking out about the devastating impact the rules would have on energy providers and consumers alike.
Let’s look at just a few examples of states raising red flags:
Former Indiana Democratic Senator and Governor Evan Bayh – who once occupied a spot on Barack Obama’s Vice Presidential shortlist – pens an op-ed in the Indianapolis Star criticizing Utility MACT rule for killing jobs and threatening reliability. (11/7)
KCAU-TV reports that proposed EPA coal and mercury regulations could cost the Nebraska Public Power District $1 billion, and the costs may be passed onto Sioux City residents in next five years. City officials feel the EPA rushed the changes, and South Sioux City Mayor William McLarty wrote a letter to the EPA describing the economic impact of the rule. (8/3)
The Courier-Journal publishes an editorial stating that Kentucky consumers will pay more for electricity due to environmental upgrades of area power plants. If the Public Service Commission approves a settlement, rates for LG&E customers will rise by about 18 percent by 2016, down slightly from the 19 percent originally projected. Kentucky Utilities customers will get more of a break, with a 9.7 percent increase by 2016 instead of the projected 12.2 percent. The LG&E increases are tied to updating two coal-fired power plants at a cost of $1.4 billion. (11/15)
KVNO News reports that power companies will be required to spend millions to meet new rules from the EPA. The state has two large coal-fired plants (Sheldon Station, south of Lincoln near Bluestem Lake, and Gerald Gentleman Station, the state’s largest coal plant, is in western Nebraska near Sutherland) and predictions for the cost of improvements range from $10 million to $20 million. (9/27)
Independent Power Producers of New York President & CEO Gavin J. Donohue writes in the [Albany] Times Union that EPA rules, including Utility MACT, have created the need for statewide repowering so that generators can reduce their emissions and provide more electricity sooner than new resources required by the rules can be built and brought online. (9/19)
Yes Weekly reports that Duke Energy has filed a “rate case” that would increase residential electricity rates by 17 percent and business rates by 14 percent, brought on by the anticipated costs associated with compliance with the EPA rules.
Ohio Manufacturers Association Public Policy Director Kevin Schmidt writes an op-ed for The Columbus Dispatch opposing the Utility MACT rule, citing an anticipated 53,500 job losses and 13% rise in electricity costs resulting from the regulation. (10/20)
The Wheeling News-Register reports that American Electric Power’s Muskingum Power Plant will close because of the Utility MACT rule. (11/16)
The Associated Press details Governor Tom Corbett’s challenge to the Utility MACT Rule. The Pennsylvania governor cites concerns about the EPA rushing its proposal and failing to properly communicate with other agencies and the energy industry about the rule’s impact, and the report estimates that compliance costs for some plants will reach $300 million. (10/30)
Sioux Falls Argus Leader reports on Governor Dennis Daugaard, Attorney General Marty Jackley and the South Dakota Public Utilities Commission all criticizing the Utility MACT Rule, emphasizing the need to delay its implementation and raising concerns about its impact on reliability. (10/17)
Chattanooga Times-Free Press editorial acknowledges Sen. Bob Corker’s (R-TN) opinion that the proposed three-year time frame for TVA to clean up its coal plants’ air controls is inadequate. (11/13)
The Hill reports that Virginia Attorney General Kenneth Cuccinelli claimed the EPA’s Utility MACT rule will increase electricity prices by as much as 35 percent and kill 180,000 jobs per year from 2013-2020. (11/8)
As reported by the Charleston Daily Mail, West Virginia Governor Earl Ray Tomblin (D) states that West Virginia alone can expect to lose 38,500 jobs over the next few years if the EPA rules go into effect as scheduled. (10/17/11)
Charleston Daily Mail argues in an editorial that the EPA is ignoring reliability concerns surrounding the Utility MACT rule. (11/16)
On top of all of this, an unreliable power grid presents a clear and present danger to national security – military bases run on electricity too – and moves us further away from energy independence. As for the supposed health benefits of the Utility MACT and CSAPR rules? Well, decreased reliability makes it more likely that the grid will shut down when it is most crucial for Americans to have a dependable energy source. How healthy does it sound to risk leaving people without heat in the bitter cold or air conditioning in the blistering heat?
Obama is clearly desperate to rally his base as he approaches reelection – the Keystone XL Pipeline and the 20,000 jobs it would have provided have already been sacrificed on that altar – but the fact that prominent Democrats like Evan Bayh, Ray Tomblin, and Joe Manchin are openly opposing the rules should give the President a clue that mainstream Democrats aren’t buying what the EPA is selling anymore.
Obama has already made it clear that he’s ready to jeopardize our energy independence for political gain; let’s hope he reconsiders before putting our national security and the safety and welfare of the American people at risk.