EPA’s Clean Power Plan and Reliability: Assessing NERC’s Initial Reliability Review
Prepared for Advanced Energy Economy Institute
The United States (“U.S.”) power system is undergoing a fundamental transformation, largely driven by advances in technology and low natural gas prices. This transformation is putting significant pressure on existing coal-fired and even nuclear generation, increasingly leads to renewable energy resources being cost-competitive with fossil-fired generation, and results in myriad choices for consumers that promise to permanently alter the role of demand in the power system. As a consequence, the fuel mix and associated emissions of the U.S. power system are changing rapidly, as are the actions taken by system operators to manage the quickly evolving electric system.
Against this backdrop the U.S. Environmental Protection Agency (“EPA”) released in June 2014 the proposed Clean Power Plan (“CPP”) as a means of implementing Section 111(d) of the Clean Air Act to regulate carbon dioxide (“CO2”) emissions from existing power plants and has since received over four millions comments on the CPP. In November 2014, the North American Electric Reliability Corporation (“NERC”) released an Initial Reliability Review (“IRR”) of the CPP.3 In this review, NERC questions several assumptions in the CPP and identifies elements of the CPP that it suggests may lead to potential reliability concerns. Several Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) have issued their own reports and submitted comments highlighting their concerns about how the CPP might impact reliability in their areas.
