FERC’s Christie: “Such an Unrealistic Standard”

On July 12, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) and Subcommittee on Energy, Climate and Grid Security Chair Jeff Duncan (R-S.C.) sent a letter to the Federal Energy Regulatory Commission (FERC) demanding information on how FERC is preparing for the impacts of the so-called Clean Power Plan 2.0 and what role the Commission had in counseling the U.S. Environmental Protection Agency (EPA) during the rule’s development.

Did FERC get the opportunity to provide significant input to the rule and highlight any reliability concerns? If so, were those concerns addressed? Did it provide input on whether carbon capture at a 90% capture rate has been demonstrated and proven to be a viable, cost-achievable technology? These are deeply important questions for the reliability of the nation’s power supply but also in determining the legality of the rule.

As the Supreme Court now weighs a possible stay of the rule, a central question is whether EPA has knowingly forced unachievable technology mandates on power plants – a 90% carbon capture rate – and has in essence mandated plant closures and fuel switching, an authority the Court has explicitly told EPA it doesn’t have.

FERC’s response to Chair Cathy McMorris Rodgers letter is illuminating, particularly the response from FERC Chairman Mark Christie.

When asked if “any generators participating in the FERC-jurisdictional markets utilize carbon capture technology at a sustained capture rate of 90 percent?” Christie’s response was clear and damning.

He wrote, “The overwhelming weight of the expert evidence indicates that a 90% carbon capture standard applied to generation units fueled by gas or coal is neither technically nor commercially feasible. I am not aware of any generating units that are commercially successful in energy or capacity markets today that have met such an unrealistic standard.”

Asked if FERC participated in the interagency review process to weigh in on the rule, he wrote, “FERC filed no formal public comments in the evidentiary record of the power plant rulemaking at EPA or elsewhere, to my knowledge. ‘Staff-to-staff’ and other private conversations that are not part of the public record have no legal weight, and it is clear from EPA’s final rule that they had little if any practical weight either, as EPA apparently dismissed any serious concerns it heard from FERC staff.”

Christie also added that EPA’s reliability assurance mechanism included in the final rule assures little. He wrote, the mechanism “is essentially just a paper drill that gives FERC no decisional role, only advisory, in preventing premature retirements of critically needed generation resources. It is so narrowly drafted that it will not materially alleviate the fundamental threats to reliability the rule will cause.”

And finally, he was asked if Section 202(c) – the Department of Energy’s Emergency Authority under the Federal Power Act – is an effective tool for FERC to prevent blackouts and brownouts. In other words, can that authority prevent a reliability crisis?

Again, Christie was clear: “No. The reality is that if the grid has a serious shortfall in power generation resources because necessary resources have retired prematurely, FERC cannot simply order them back onto the grid. Once these needed resources retire, they are gone.”

Christie’s alarming responses are exactly why the court needs to step in and stay the rule before implementation sets off a chain of events that can’t be undone. As FERC, the North American Electric Reliability Corp., and the nation’s grid operators and utilities have made abundantly clear, the country is racing towards a power supply shortfall and EPA’s unworkable and unlawful rule is making a deeply challenging situation simply untenable.