On September 14, 2011, the House of Representatives Committee on Energy and Commerce Subcommittee on Energy and Power held a hearing to explore the impact of current and pending EPA utility regulations on electric system reliability. In a somewhat unusual event, all five members of the Federal Energy Regulatory Commission (“FERC” or the “Commission”) testified before the subcommittee about FERC’s role in studying the reliability impact of EPA regulations. Later in the hearing, the subcommittee heard from several state utility commissioners, a state Attorney General, and other interested parties. The hearing became heated at times as the Republican majority pressed FERC to explain their lack of action to date in evaluating the impact of EPA rules on the grid.
The primary focus of the hearing was FERC’s recent acknowledgement that it has not conducted a meaningful reliability study of the EPA rules. FERC Chairman Jon Wellinghoff testified that while the Commission has a role in reliability, it is not equipped or staffed to undertake a comprehensive resource analysis to address potential local and regional electric reliability impacts of the proposed EPA regulations. Chairman Wellinghoff further indicated that planning authorities such as Regional Transmission Organizations are the appropriate forums to address these types of impacts, and he pointed to PJM as undertaking “steps in that direction.” Chairman Wellinghoff indicated that in order to determine whether generators were likely to retire, and assess the impact of the EPA’s regulations, the Commission would need detailed information concerning generators, including site maps and facility diagrams, which utilities are hesitant to provide to FERC. In response to questions from the subcommittee, Chairman Wellinghoff affirmed that with “enough time and information,” the electric industry can “plan to meet whatever EPA regulations become final.”
In contrast to Wellinghoff’s deferral to planning authorities, Commissioner Philip Moeller testified that FERC must “become further involved in the reliability implications of EPA actions” and that the Commission should not “outsource that function” to RTOs, ISOs or NERC. “FERC is part of the federal government, and FERC has a statutory obligation to consider matters that could have an impact on the reliability standards,” Moeller testified. Commissioner Marc Spitzer recommended that EPA and FERC continue to dialogue in a more formalized and expansive fashion and expressed concern that regulated entities have adequate time to plan their systems to comply with EPA rules as promulgated. Commissioner John Norris testified he is “sufficiently satisfied that the reliability of the electric grid can be adequately maintained as compliance with EPA’s regulations are achieved.” Commissioner Cheryl LaFleur testified that while she believes EPA does understand reliability considerations and the need for flexibility in specific cases, she will “champion” specific extensions when needed for reliability.
During the hearing, Chairman Wellinghoff engaged in a heated exchange with Representative John Shimkus (R- IL). Representative Shimkus expressed frustrations over the lack of coordination between FERC and EPA and the potential loss of jobs due to EPA’s rules.
Copies of each Commissioner’s testimony and responses to the subcommittee are available here.