Mandating the Impossible

Author: Rich Nolan
Coal keeps the lights on

The regulatory onslaught against the reliable sources of power that support the U.S. electricity grid continues to advance.

The Clean Power Plan 2.0 (CPP 2.0) is part of the Biden administration’s multi-pronged plan to shutter well-operating fossil fuel power plants well before there is anything in place to make up for the stable electricity they currently provide. A second, and more aggressive, take on President Obama’s unlawful CPP, the regulatory framework is notably aimed at American coal and natural gas — the very sources of energy that meet 60% of the nation’s power demand and keep the electricity flowing when it’s needed most during periods of bitter cold and scorching heat. Concerns over the contents of the plan, including those from energy experts, grid operators and members of Congress, have been pointed, and rightfully so — the plan is ill-informed and puts Americans at risk of both electricity outages and more energy-driven inflation.

The Environmental Protection Agency (EPA) has taken the reins of the nation’s energy policy and is running roughshod over the concerns and warnings of the nation’s utilities, grid operators and reliability regulators with potentially disastrous results for our grid reliability, economic competitiveness and the livelihoods of millions of Americans.

Overlooking Coal, Ignoring Reality

Coal has been the foundation of the domestic energy mix for decades — providing a stable source of electricity that can be ramped up when demand surges, or when weather-dependent renewables and an overstretched natural gas system can’t meet our energy demands.

Much like its unlawful predecessor, the CPP 2.0 does not account for the differences in generation mix across the country, variations in weather conditions from state to state or the vast interstate transmission infrastructure that still needs to be built to make renewable generation viable.

Put simply, the rule’s fundamental and unfixable flaw is that it mandates the impossible. The authors of the CPP 2.0 will tell you they aren’t forcing the closure of any power plants. According to their rule, plants can remain operational IF they install technologies that are not yet ready for commercial use, they must do so at an astronomical cost, and in accordance with an unachievable timeline. The only answer to an ultimatum built from impossibles and hypotheticals is a reality check: inevitable plant closures.

And that reality check is in sharp contrast with the reality of how we generate electricity in the U.S. and around the world. Eighteen states rely predominantly on coal for their power production. The implementation of CPP 2.0 — along with the cumulative impact of the blitz of rules the EPA is using to target the coal fleet — could decimate the fleet overnight sending shockwaves into our electricity system. Grid operators and regulators are already warning of generating capacity shortfalls in the years ahead. EPA’s agenda will make an alarming situation all but untenable.

The Midcontinent Independent System Operator (MISO), PJM Interconnection, L.L.C (PJM), the Electric Reliability Council of Texas, and the Southwest Power Pool joined together in raising their concerns with EPA’s proposed plan, warning, “The Joint ISOs/RTOs are concerned that the substance of the Proposed Rule as presently configured, as well as its timing, have the potential to materially and adversely impact electric reliability. Moreover, the Proposed Rule, when combined with other EPA rules and other policy actions, could well exacerbate the disturbing trend and growing risk wherein the pace of retirements of generation with attributes needed to ensure grid reliability is rapidly exceeding the commercialization of new resources capable of providing those reliability attributes.” They added, “[T]he record is insufficient for the EPA to conclude that the Proposed Rule will not adversely impact reliability. The EPA should therefore reconsider moving forward with the Proposed Rule in its present form.”

Reliability Demands Thoroughness

EPA is downplaying the impact of its rules and rushing ahead without an adequate understanding of the impact its blitz of rulemakings will have on the grid and no plan to offset that impact. Outside analysis from the nation’s reliability regulators should have been a key component of developing CPP 2.0 but it hasn’t been.

With the alarms sounding loudly from grid experts across the country, the EPA needs to hit pause. The energy transition the administration wants will fail if it moves too quickly and undercuts the very foundation of the nation’s grid reliability and leaves the nation alarmingly short of dispatchable generation.

The CPP 2.0 needs a drastic revision. Without considering the contributions of coal, in addition to the massive technological and infrastructure hurdles that need to be addressed to build out any semblance of reliability if it is reduced from the electricity mix as rapidly as has been proposed, the administration is not advancing with a complete and accurate set of facts. Getting to our energy future shouldn’t mean sacrificing grid reliability and energy affordability along the way. Now is the time to course correct and develop a practical, realistic plan that works to get us there.