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LaFleur Preps For FERC's Input Into Clean Power Act Transition

On the eve of the first in a series of technical meetings to discuss implications of compliance approaches to the Environmental Protection Agency's (EPA) proposed Clean Power Plan (CPP) rule, FERC Chairman Cheryl LaFleur on Wednesday offered a preview of the lengthy process that lays ahead for her agency.

"What I hope is that we hear from a lot of different people about their perspectives about how compliance with the Clean Power Plan might impact them, and begin to really get concrete on what FERC [the Federal Energy Regulatory Commission] will need to do going forward to help support that," LaFleur told hundreds of regulators gathered at the National Association of Regulatory Commissioners' Winter Committee Meetings in Washington, DC.

The first of the technical conferences is scheduled to be held at FERC headquarters Thursday (Feb. 19). Other staff-led regional technical conferences are scheduled to be held on Feb. 25 in Denver, March 11 in Washington, DC, and March 31 in St. Louis.

FERC's role in the CPP rule process is only to assist EPA in developing the carbon pollution standards for power plants, LaFleur said. Implementing the rules will involve added use of natural gas as well as renewable fuels.

"In the next few years, as we work through compliance, I think FERC will have three prominent roles to play: the first on our energy infrastructure, the second on energy markets, and thirdly as an honest broker for discussion.

“I believe that we as a nation can make real environment progress, including on climate change, but only if we're willing to build the infrastructure, both gas and electric, and adapt our energy markets that serve two-thirds of the citizens, to make that possible..."

According to LaFleur, Building Block 2 of the CPP -- which calls for increased use of power sources that emit lower amounts of carbon pollution, such as natural gas combined cycle units -- will likely account for the largest amount of carbon reduction.

"In addition, what we've heard from many people is that where states and regions have the flexibility of approach, many people are looking to the addition of more gas generation in place of other generation as the most cost effective way to get to their overall goals,” she said.

"We are fortunate as a country to have abundant and relatively affordable natural gas to help support those kind of goals. Without it, our aspirations would be much harder to achieve. But utilizing that gas for generation, whether it's using the generation you already have more aggressively, or building new gas generation, will require gas infrastructure -- pipelines, spurs on existing pipelines, compressor stations, to get the gas where it needs to be to keep the lights on.

"But while gas, I think, is critically needed to help us achieve our environmental goals, it has environmental costs of its own. Pipelines are facing unprecedented opposition from national groups, including environmental groups. We're hearing a lot about this at FERC, and I don't expect it to stop...Our continued work in permitting gas infrastructure will be essential to the successful implementation of the Clean Power Plan. I'm dedicated to making sure it's fair, clear, timely -- sometimes the hardest of all -- and transparent.

"We're not an environmental regulator, we're not tasked with writing the final rule...[EPA] has their hands full sorting through the four million comments by mid-summer, but we have been involved in this discussion. Over the past several months we have been visited by numerous groups from across the country, all segments and all regions, with a wide range of views on the Clean Power Plan; people who are deeply, and I think sincerely, concerned that the lights will go out, people who think the EPA didn't go far enough, and are not giving enough credit to folks have already done a lot, and every view in between.

“And we have been in listening mode, not in taking a position mode, in really trying to figure out what our role should be, what we should do, and how we lend value," LaFleur said.

In June 2013, President Obama directed EPA to work closely with states, industry and other stakeholders to establish carbon pollution standards for both new and existing power plants (see Daily GPI, June 26, 2013). A presidential memorandum called for EPA to finalize the proposed Clean Power Plan by June 1, 2015.

Since then, EPA has issued three proposals in an effort to cut carbon pollution from the power sector, the single largest source of carbon pollution in the United States. One proposal covered new power plants (see Daily GPI, Sept. 23, 2013), another covered existing power plants (see Daily GPI, June 2, 2014), and a third covered modified and reconstructed plants. A final version of the proposals to cut carbon pollution from the power sector, which some had anticipated as early as this year, will not be completed until the middle of summer, an EPA official said last month (see Daily GPIJan. 7).

EPA received more than two million public comments on the first proposal and another two million comments combined on the second and third proposals (see Daily GPIDec. 4, 2014). Industry organizations overall have called the proposed rules an economic burden, while environmental groups urged their implementation to help prevent climate change.

A trio of powerful congressional Republicans, citing "an apparent pattern of limited substantive FERC input" in the development of the EPA's Clean Power Plan and rulemakings bearing on electric reliability, recently asked individual commissioners to provide details of any such collaboration between the agencies (see Daily GPI, Dec. 23, 2014).

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