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STATEMENT FROM ADVANCED ENERGY ECONOMY ON TODAY'S "Potential Reliability Impacts of EPA’s Proposed Clean Power Plan: Phase I" REPORT FROM THE NORTH AMERICAN ELECTRIC RELIABILITY CORP. (NERC)

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“Much like its initial assessment, NERC’s new assessment overstates the reliability issues associated with EPA’s Clean Power Plan – issues that can be managed by changes already under way,” said Malcolm Woolf, Senior Vice President for Policy and Government Affairs for Advanced Energy Economy, a national business association. “The NERC assessment tells us very little about how to move forward other than to slow down. We need NERC to be engaged on the subject of reliability, but in this assessment of the Clean Power Plan, it has made some of the same mistakes that marred its initial reliability review.”

“NERC’s modeling exercise suffers from four flaws,” Woolf continued. “First, it overlooks many of the operational tools that grid operators have developed, and are continuing to develop, to manage a grid that NERC itself recognizes is already changing along the lines of the Clean Power Plan – shifting from coal to natural gas, scaling up renewable energy, and reducing demand through energy efficiency. For instance, ISO New England’s new ‘Pay-for-Performance’ rules will create a market incentive for more reliable gas supply during times of peak winter demand. Second, while purporting to allow advanced energy technologies to compete with other resources, NERC’s analysis excludes some technologies like demand response and puts artificial constraints on the contributions other technologies, including renewable energy and energy efficiency, skewing the results. Third, it imposes annual emission caps in place of EPA’s interim targets when in fact states have the flexibility to spread their emission reductions over the 10-year compliance period. Finally, NERC has conducted its analysis on EPA’s proposed rule, instead of waiting for EPA’s final rule, which will be released this summer – in which EPA has said it will make changes based on comments from states, utilities, and the public filed last fall. As a result, NERC’s analysis is not only flawed but already outdated.”

“Contrary to NERC’s analysis, we are confident that, with all the options available to them for compliance with EPA’s final rule, states, working with their utilities, will be able to modernize their electric power systems and provide secure, clean, and affordable energy for the 21st century,” Woolf concluded.

Background

The new report by the North American Electric Reliability Corp. (NERC) is a follow-up to its Initial Reliability Review (IRR), released last November, in which NERC raised a variety of concerns about the impact of EPA’s Clean Power Plan on reliability. A report by The Brattle Group, a leading consulting firm to utilities and grid operators, provided a detailed analysis of NERC’s preliminary reliability concerns, ultimately concluding, “compliance with the CPP is unlikely to materially affect reliability.” The Brattle Group report, which was designed as feedback for NERC on its IRR, was commissioned by the Advanced Energy Economy Institute and presented at the National Association of Regulatory Utility Commissioners’ winter meetings in February.

“Following a review of the reliability concerns raised and the options for mitigating them, we find that compliance with the CPP is unlikely to materially affect reliability,” states The Brattle Group report. “The combination of the ongoing transformation of the power sector, the steps already taken by system operators, the large and expanding set of technological and operational tools available and the flexibility under the CPP are likely sufficient to ensure that compliance will not come at the cost of reliability.” Another assessment of the Clean Power Plan conducted by Analysis Group, which is also a respected consulting firm for the utility industry and grid operators, reached a similar conclusion.

 

About Advanced Energy Economy

Advanced Energy Economy is a national association of businesses and business leaders who are making the global energy system more secure, clean and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. AEE and its State Partner organizations are active in 25 states across the country, representing roughly 1,000 organizations in the advanced energy industry. Visit Advanced Energy Economy online at: www.aee.net.

Media Contact

Monique Hanis, Director of Media Relations & Publications, mhanis@aee.net, 202-391-0884.

 

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