Murkowski accuses FERC of ceding power to EPA

Source: Hannah Northey • E&E • Posted: Wednesday, February 8, 2012

The top Republican on the Energy and Natural Resources Committee says the Federal Energy Regulatory Commission should be doing more than just advising U.S. EPA on whether power plants should be given extensions to comply with new air pollution rules.

Alaska Sen. Lisa Murkowski believes a FERC staff paper released last month that lays out an advising role for the commission relinquishes too much power to EPA and does not require the agency to take advice from electric reliability professionals.

FERC staff released the draft staff white paper in response to EPA’s air toxics rule that requires coal- and oil-burning power plants to significantly cut emissions of mercury, acid gases and several other volatile organic compounds.

EPA offered various options for extensions, and FERC staff said the commission could review utilities’ applications for a fifth-year extension (Greenwire, Jan. 31).

“The paper acknowledges that EPA is the key decisionmaker here and that EPA has no obligation to take advice from FERC or electric reliability professionals,” said Robert Dillon, a spokesman for Murkowski. “That is regrettable, and it is the reason that Senator Murkowski has begun to develop a necessary reform to put a ‘safety valve’ in the Federal Power Act.”

But Dillon said the senator acknowledges the paper is only a draft and is looking forward to the commission’s views. Comments on the staff paper are due by the end of the month.

“Just as the technical conference in November prompted evidence for a more meaningful dialogue, we hope the comments on the staff paper will do the same,” he said. “Reliability is too important to leave to platitudes.”

Murkowski has slammed EPA and FERC in recent months for downplaying the number of plants that could retire in the coming years due to EPA rules and cheap natural gas prices.

In December, Murkowski said she had begun crafting legislation to allow power plants to run for a period of time after the new EPA rules took effect if there was not enough time to replace the lost generation (E&ENews PM, Dec. 12, 2011).

Democratic FERC Commissioner Cheryl LaFleur said at the National Association of Regulatory Utility Commissioners’ winter conference in Washington, D.C., yesterday that she wanted to reserve judgement on how FERC’s role could change going forward.

“I think it’s important that FERC satisfy its responsibility, and Senator Murkowski is an important commenter. I think we’re going to get a lot of comments,” she said.

Obama administration officials have repeatedly said the EPA rules provide enough flexibility to safeguard electric reliability and told attendees at the NARUC conference they are interested in working with utilities going forward.

“We do not believe that additional legislation is required to address this orderly compliance in a way that keeps the lights on,” said Gina McCarthy, EPA’s air chief.

But Republicans have been quick to point out that EPA’s rules are already triggering plant closures.

Murkowski and Republican FERC Commissioner Philip Moeller yesterday at the NARUC meeting pointed to Ohio-based FirstEnergy Corp.’s recent decision to retire six coal plants because of EPA’s mercury and air toxins rule.

Moeller said EPA did not take companies like FirstEnergy into consideration and the agency’s low estimates on plant retirements “strains the credibility” of EPA.

“Perhaps a different analysis regardless of what the number is would probably provide people with a little bit more confidence in the way you approach this,” Moeller said.

Mark Durbin, a spokesman for FirstEnergy, said during an interview yesterday that it did not make economic sense to install environmental controls on the plants by 2015 as would have been required under the mercury rule. Environmental groups, however, argue that other economic factors such as cheap gas and renewables are playing into increasing coal plant retirements.

“Coal used to be cheaper than natural gas. That is no longer necessarily the case,” said Ethan Davis, an energy analyst with the Union of Concerned Scientists. “The drop in natural gas prices, cheap wind and the low cost of efficiency could be playing a role in decisions that drive coal-plant closures.”

McCarthy said “a lot of what we’re seeing announced, we saw three years ago” before the rules were announced.


She added, “We really need to focus on how the rule is accelerating or challenging the course that you think the energy world was on anyway.”