FERC, RTOs, ISOs, NARUC, Governors and Politicians… there is no shortage of concern over the potential impact of the new Environmental Protection Agency rules regarding clean air. Will the cost of compliance force the shut down of many coal-fired power plants? Will reliability suffer as a result? These issues are at the core of the debate regarding EPA’s aggressive moves to save the environment and our health. A group of governors sent a letter to President Obama requesting he intervene to get the EPA to slow down. Utah Gov. Gary Herbert is leading the multi-state gubernatorial effort seeking a delay in the Utility MACT (Maximum Achievement Control Technology) Rule. The governors believe implementation should not occur until the impact on electricity reliability is understood.

During a recent House Subcommittee on Energy and Power hearing, FERC Commissioners provided a preliminary report on the potential retirement of coal-fired power plants. It provides an excellent, high level overview of the many environmental laws and the potential impact by region. However, the Commissioners admit FERC has not fully investigated the impact of the new rules on reliability. Chairman Wellinghoff believes RTOs, ISOs and other transmission coordinators are in the best position to provide a detailed impact analysis. Ironically in its Joint Comments to the EPA, the RTOs/ISOs are requesting a Reliability Safety Valve as a stop gap measure to delay a power plant’s compliance when necessary to preserve reliability.

My take from current analysis is that in the aggregate there will be enough generation capacity. The risks are on a more localized and regional scale – similar to the outages that occurred in the Southwest earlier this year. A combination of generation outages, derates and unseasonably cold weather lead to a power shortage forcing rolling brownouts. Hopefully enough time for careful planning and the proposed Reliability Safety Valve can help to avoid this type of event.

Meanwhile, FERC has announced it will hold a technical conference beginning November 29, 2011 to discuss policy issues related to reliability of the Bulk-Power System, including concerns that may arise in the course of compliance with EPA regulations.