New EPA Rules Will Erode Power Grid Reliability, Report Finds

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Energy reserves available to the power grid for peak use could be cut in half, says an industry report, as power plants are retired for noncompliance with stiffer clean-air and clean-water rules.

Four federal environmental regulations to improve water and air quality could by 2018 chop by nearly half the amount of projected reserve energy available to the US power grid, says a new report.

Nationwide, hundreds of coal-, oil-, and gas-fired power plants, with a collective capacity of about 76,000 megawatts (one megawatt provides enough power for about 750 homes), could be retired if the forthcoming rules are implemented under the fastest proposed timeline, says the report by the North American Electric Reliability Corp. (NERC), an industry group charged with ensuring grid reliability. A "moderate" pace of implementation would lead to a 46,000-megawatt cut in reserve generating capacity, it says.

NERC determines the amount of generating capacity that needs to be on standby to meet peak electricity load in the summer months and to cover for any unexpected generating outages. That "planning reserve margin" would drop by almost half if the environmental rules are implemented under the fastest possible scenario. Under a "moderate" timetable for implementation, the reduction in reserve capacity would be less.

"The results of this assessment show a significant potential impact to reliability should the four EPA rules be implemented as proposed," said Gerry Cauley, NERC president and CEO, in a statement.

Mr. Cauley did not argue that the environmental rules are impossible to accommodate, but he did say a longer implementation time will probably be needed.

"To ensure bulk power system reliability, the proposed rules should provide sufficient time to acquire replacement resources, offsetting the reductions in capacity from unit retirements and deratings from environmental control retrofits," he said.

Utility companies have long argued that tougher environmental regulations would reduce grid reliability. Environmental groups and some green energy groups hailed the report, saying that its close examination proves that three of the four rules would have little or no impact on grid reliability.

"The NERC assessment affirms that the electric power industry can maintain electric system reliability while improving our air quality and protecting public health," said Michael Bradley, executive director of the Clean Energy Group, a coalition of electricity generating and electricity distribution companies committed to environmental stewardship, in a statement. …

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