Platts Energy Podium: U.S. FERC Eyes Key Role in New EPA Power Sector Emission Reduction Effort

WASHINGTON, April 8, 2015 /PRNewswire/ -- U.S. Federal Energy Regulatory Commission (FERC) officials are busy preparing recommendations for how the commission can work with the Environmental Protection Agency (EPA) to ensure the reliability of electricity flow during the implementation of EPA's landmark rule to reduce power sector greenhouse gas emissions, FERC Commissioner Colette Honorable, who spoke at the Platts Energy Podium newsmaker event in Washington, said Wednesday.

"I do understand that it's imperative that we work quickly," Honorable said. She outlined the key role that FERC can play to ensure continuous supply of electric power during the implementation of the EPA's Clean Power Plan. The plan, as proposed, would cut power sector carbon emissions to 30% below 2005 levels by 2030.

The proposal is expected to drive a further shift away from coal-fired resources and toward natural gas-fired generation, as well as create additional opportunities for renewable and energy efficiency resources.

The EPA rule is slated to be finalized this summer, and Honorable noted that FERC staff is gleaning information from four commission technical conferences to offer suggestions to EPA.

Honorable pointed to two proposals by utilities and other stakeholders on how FERC can help ensure reliability under the evolving rule. She offered a positive assessment of what's been called the "reliability safety valve," wherein states requiring compliance flexibility to address reliability issues would have FERC sign off on the nature of the problem.

Of the safety valve, Honorable said that "is certainly an issue that provides an opportunity for stakeholders -- no matter what they think about the Clean Power Plan -- to come together, to collaborate on ways to ultimately ensure that there won't be any concerns with reliability once the Clean Power Plan is implemented."

Honorable did note concerns, however, about a related proposal that would see FERC evaluate state compliance plans prior to their approval at EPA to ensure that those plans, individually or collectively, would not create reliability issues. The so-called "reliability assurance mechanism" has gained support from utilities but concern from state regulators, given their primary jurisdiction over generation planning, she said.

The commissioner also highlighted efforts to bolster the nation's aging energy infrastructure despite increasing pressure from environmentalists and landowners protesting pipelines and other gas-related development. Calling the citizen engagement a "new reality," she welcomed diverse points of view and suggested that such engagement has not significantly delayed infrastructure development.

Honorable also pointed to split opinions among stakeholders on a pending guidance from the White House Council on Environmental Quality (CEQ) that would require FERC and other agencies to expand how they evaluate greenhouse gas impacts in reviewing projects under the National Environmental Policy Act. Many natural gas industry players have called for CEQ to scrap the guidance, warning it could delay necessary infrastructure.

If the guidance becomes final, "I will be committed to ensuring that our trains move along as promptly as they need to provide that certainty and provide a proper, thorough and prudent examination of the applications that come before us," Honorable said.

Access the full podcast of Platts Energy Podium with FERC Commissioner Colette Honorable at:  http://www.platts.com/podcasts-detail/energypodium/2015/april/honorable. (You may be asked for a cost-free, one-time log-in to the website for access; if so, enter a log-in and password of your choosing).

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