Report on Grid Reliability and the Clean Power Plan Needs More Work

A report issued by the North American Electric Reliability Corp. (NERC) today raises questions about grid reliability under the U.S. Environmental Protection Agency’s plan to reduce pollution from existing power plants, but it may be overstated in some respects.

For those who don’t know, NERC is the electric reliability organization for the U.S. and Canadian power grid – also known as the Bulk Power System – which serves more than 334 million people. Think of NERC as our national grid doctor; NERC’s experts periodically assess and report on each region’s power grid readiness, much like a detailed medical exam, and they recommend changes when necessary to improve performance and reliability of electric service.

Regional planning a key to success

Returning to NERC’s report: A good descriptive title for it could be “Working Together, States and Grid Operators Can Strengthen Reliability and Cut Carbon Pollution.” The report sensibly recommends that states coordinate with regional power grid operators as states develop compliance options under EPA’s proposed Clean Power Plan. That’s good, since existing grid planning processes are in place and active in every region of the United States. They are designed perfectly to meet the need here: to help states choose the best mix of cleaner, reliable, and consumer-friendly resources to meet or exceed the Clean Power Plan’s final emissions standards.

We also concur with NERC’s conclusion that detailed reliability assessments should wait until after EPA releases a final rule in June 2015. As NERC starts to take a closer look, we encourage it to focus on the final emissions reduction target levels -- rather than the EPA “Building Blocks” -- in assessing resource adequacy and reliability issues, since states are responsible for meeting the targets, not the Building Block levels.

Report may overstate some assumptions

NERC also commented on the analytical assumptions U.S. EPA used to develop deadlines and emissions levels. NERC’s assumptions need further explanation and review, because some of them appear to overstate reliability issues related to clean power grid integration and expansion. For example:

  • In its discussion in how states can use Building Block 3 (Renewable Energy), NERC did not appear to give sufficient credit to grid operator, government, and other studies showing that the grid can reliably integrate significantly more wind and solar power than current levels, and that the fuel savings and emissions reductions from the additional clean power far outweigh minimal grid integration costs. As NERC moves forward with its reliability analysis, we encourage it to incorporate these detailed studies and the increasing on-the-ground experience with renewable power.
  • Likewise, billions of dollars have been spent in recent years to improve transmission grid reliability and delivery of wind and solar power, and billions of dollars’ worth of additional projects are underway to help to deliver more renewable energy to consumers and further boost grid reliability. NERC should account for these and other infrastructure developments in its future studies.
  • NERC questions whether EPA has overstated expectations for energy efficiency (EE) savings. Recent experience tells us that energy efficiency can avoid the equivalent of up to 20 percent or more of total electricity sales (more than EPA’s assumed 1.5 percent annual savings).
  • Also on energy efficiency, NERC questioned the long-term sustainability of programs to help customers and businesses use energy smarter. We are in no danger of exhausting EE as a resource. States and regions like New York, California, and the Pacific Northwest, have decades-long histories of significant, cost-effective energy savings with targets that have grown more stringent (and saved consumers more money) over time.

The “reliability safety valve”

The NERC report also calls for consideration of a “reliability backstop” where there is a demonstrated reliability need. A limited safety valve – which extended power plant compliance deadlines for plants when necessary to ensure grid reliability – made sense as part of the Mercury and Air Toxics Standards, which had a much shorter deadline and were specific to power plants. In this case, the compliance deadline is longer and states have significantly more flexibility in crafting compliance strategies to meet state carbon pollution targets.

In this case, we need to be careful not to allow a long-term reliability safety valve to create unintended consequences that could weaken compliance efforts. States which use all available resources will minimize or avoid reliability issues, and EPA should review state plans with that consideration in mind. EPA also should maintain final responsibility under its Clean Air Act authority as to whether to reject or delay a plan on reliability or other grounds.

Clean energy is reliable energy

Renewable energy and energy efficiency already are changing the face of the electric transmission grid, without significant reliability impacts to date, or as the studies show us, going forward. The Clean Power Plan provides a wonderful opportunity for states and grid operators to coordinate more closely as states develop compliance solutions, using existing, now-familiar processes for regional and inter-regional grid planning. As NERC continues to study the Clean Power Plan, it should leverage the experience of states and grid operators who now are successfully integrating large amounts of clean energy—such as wind and solar -- into the grid and saving consumers money in the process.

About the Authors

John Moore

Senior Attorney, Sustainable FERC Project, Energy & Transportation program

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