Energy and Commerce Leaders Respond to Growing Reliability Concerns

November 29, 2011

WASHINGTON, DC - Federal regulators charged with ensuring the reliability of the nation's electric grid are meeting this week to discuss the potential consequences of a slew of new EPA regulations. The Federal Energy Regulatory Commission is hosting the technical conference in response to concerns that new EPA rules will threaten electric reliability and increase electricity prices. FERC had seemed reluctant to undertake a closer review of the reliability impacts of EPA's power sector rules until an Energy and Power Subcommittee hearing highlighted these critical concerns.

Leaders of the Energy and Commerce Committee have sent a series of letters in recent weeks to FERC, EPA, and the Department of Homeland Security seeking information on the extent to which these agencies have analyzed the cost and reliability impacts of EPA's power sector rules, including the Cross-State Air Pollution Rule and the Utility MACT Rule. This builds on earlier efforts throughout the year to get answers about how EPA rules will affect power generation. Members are concerned that President Obama's EPA is moving forward with its aggressive regulatory agenda without a full assessment of how its new rules will affect electric reliability, our energy security, and our economy. FERC's conference is an opportunity to shed light on these concerns. 

"We need much better answers to these reliability concerns than we have gotten thus far," said Energy and Power Subcommittee Chairman Ed Whitfield (R-KY). "Estimates show EPA's new regulations will force significant amounts of generation capacity to retire or require expensive retrofits. Ratepayers cannot afford to play a guessing game when the stakes are so high. The potential consequences of an unreliable electricity supply could be disastrous to our economy and national security."

FERC's conference comes on the heels of a new report released yesterday by the North American Electric Reliability Corporation which projects EPA's rules will pose significant reliability risks to regions across the country. Based on the results of the study, NERC concludes that, "Constricted compliance deadlines will challenge the electric industry's planning horizons, existing planning processes and typical construction schedules." Consequently, NERC recommends inserting greater flexibility into EPA's rules to preserve reliability, including "the deferral of compliance targets and granting extensions where there is a demonstrated reliability need." Further, NERC suggests that "more time is needed in certain areas to ensure resource adequacy and local reliability requirements can be addressed during the transition and compliance period." NERC also cites the need for greater collaboration and coordination among regulators including EPA, FERC, DOE and state utility authorities. 

"NERC's report confirms that EPA's rules will result in significant plant shutdowns and the early retirement of generating units. We need to know the cumulative impacts of all of EPA's regulations, which is why the House-passed TRAIN Act is so important," said Rep. John Sullivan (R-OK), Vice Chairman of the Energy and Power Subcommittee and author of H.R. 2401, the Transparency in Regulatory Analysis of Impacts on the Nation Act. "We need an honest accounting of how these regulations are impacting our economy, and it's time for the Senate to follow our lead and send the TRAIN Act to the President's desk."

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