Energy and Power Subcommittee Continues To Press Federal Regulators on Electric Reliability Concerns

October 6, 2011

WASHINGTON, DC - Following its recent hearing with members of the Federal Energy Regulatory Commission, the House Energy and Commerce Subcommittee on Energy and Power submitted an additional series of questions to the Commissioners for the record this week. These questions will assist the committee in gathering critical information concerning the potential impact of EPA's recent and pending power sector rules on the reliability of our nation's electric grid.

Testimony at last month's hearing revealed FERC has no plans to conduct a formal analysis of how these rules will affect reliability. Members are questioning this decision, particularly given the results of FERC's preliminary analysis, which shows up to 131 gigawatts of power may be at risk from EPA's new power sector rules, jeopardizing 16 percent of our nation's generation capacity.

While FERC Chairman Jon Wellinghoff has downplayed these reliability concerns, his own staff has been more explicit about the need to be proactive. The Commission's failure to act stands in direct contrast to FERC staff's recommended "next steps" outlined in its preliminary analysis calling for more reliability studies. Commissioners Philip Moeller and Marc Spitzer echoed these requests in their testimony to the subcommittee when they expressed the need for increased involvement from FERC and coordination with other federal agencies and planning authorities:

EPA's own analyses show that its regulations will lead to power plant closures across the country and thus the agency has claimed it will keep stakeholders and regulators informed during the rulemaking process.  The preamble to EPA's proposed Utility MACT Rule, issued in May 2011, stated that, "EPA itself has already begun reaching out to key stakeholders including not only sources with direct compliance obligations, but also groups with responsibility to assure an affordable and reliable supply of electricity including state Public Utility Commissions (PUC), Regional Transmission Organizations (RTOs), the National Electric Reliability Council (NERC), the Federal Energy Regulatory Commission (FERC), and DOE.  EPA intends to continue these efforts during both the development and implementation of this proposed rule." 

Despite EPA's assurances, Chairman Wellinghoff explained in his written response to the committee "communications between FERC staff and EPA staff have not been ongoing." This is consistent with Wellinghoff's previous representations to the committee, which showed meetings between FERC and EPA staff stopped in May. As Wellinghoff's testimony reveals, the extent of communication and coordination between FERC and EPA staff remains unclear:

During witness questioning, state and regional authorities expressed frustration over EPA's failure to communicate.  Public utility commissioners and regional grid operators stated that EPA has not been forthcoming with information that would permit them to complete an accurate reliability assessment:

Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) called on FERC to conduct a formal reliability analysis of EPA's rules and issued the following statement:

"The uncertainty surrounding these rules is just plain scary, especially since it is clear that FERC -despite its statutory obligation to protect the reliability of the electric grid -does not even know the extent of the impact EPA's rules will have on reliability. In fact, no one seems to know. It would therefore be irresponsible to move forward with these rules without a better understanding of how they will affect our utility sector. Greater coordination among federal agencies and regional authorities is crucial to ensuring American families will be able to keep the lights on once these rules go into effect. More excuses are simply not acceptable. This committee will continue to press both FERC and EPA for a comprehensive analysis of these rules until the job is done."

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