Power Outages from Cold Weather and Regulatory Storm

COMMENTARY Energy Economics

Power Outages from Cold Weather and Regulatory Storm

Jan 12th, 2015 4 min read
COMMENTARY BY
Katie Tubb

Policy Analyst

Katie Tubb is a policy analyst for energy and environmental issues in the Thomas A. Roe Institute for Economic Policy Studies.

“[W]e almost ‘ran out of gas.’ We dodged a bullet this past winter.” So said Chairman and CEO of New England’s largest electricity provider. A year later, winter is again testing the reliability of the electric grid to provide Americans with electricity and heating. During last week’s cold snap, Duke Energy, which supplies power to over 7 million people, asked its customers to “voluntarily reduce their thermostat, reduce their lighting needs, hold off on using the dishwasher or washing machine and dryer,” according to Tom Williams of Duke Energy, so as to avoid having to resort to a rotating schedule of cutting power to customers.

The cold weather puts incredible demand on electricity suppliers and the grid, but thankfully electricity is still a facet of life that most Americans take for granted when we turn up the thermostat. But regulations proposed by the Obama Environmental Protection Agency (EPA) are threatening that affordable, reliable energy—and not just when temperatures drop.

Over the past several years, the EPA has rolled out a string of regulations that all but end the use of coal to generate electricity, which only a few years ago supplied some 40 percent of the nation’s power. The capstone regulations, euphemistically billed the “Clean Power Plan,” will force states to cap carbon dioxide emissions from existing and future power plants by a national total of 30 percent (from 2005 levels) by 2030 with an intermediate deadline just five years from now. The EPA has left it to states to do the dirty work of figuring out how to reach that target by replacing otherwise functioning coal plants with new natural gas “renewables,” nuclear power, and what the EPA politely calls “demand reduction.” The rules are scheduled to be finalized this summer unless Congress intervenes.

While the EPA is confident it can be done, plenty of others are much less so.

  • The North American Energy Reliability Corporation (NERC), charged by the government to maintain a reliable grid across the continent, published two reports last fall concluding that the Clean Power Plan’s deadlines are unrealistic and gains made by efficiency projects are indefensibly optimistic. NERC also determined that renewable energy mandates and EPA regulations, not including the Clean Power Plan, have threatened the long-term reliability of the grid.
  • Power companies doubt the target dates can be met, given the uncertainty of where new investment will be needed to replace closed plants and the many years it takes to raise funds, get stakeholder support, acquire permits, and complete construction.
  • The U.S. Energy Information Administration has projected that regulations will accelerate closures of “larger and more efficient” power plants, causing 60 gigawatts of electricity to be taken off the grid by 2020.

Further, it doesn’t appear that the EPA has given enough attention to the experts: In a congressional hearing last summer, commissioners of the Federal Energy Regulatory Commission confirmed that there was very little meaningful discussion with the EPA on the rule—let alone coordination—over what one commissioner called “a complete redesign of markets.”

Writing in The Wall Street Journal, Representative Kevin Cramer (R–ND) hit the nail on the head:

EPA personnel are environmental regulators, not electrical engineers, and have no experience in or knowledge of the construction and operation of power grids.… It is irresponsible in the extreme that this plan has been put forth without due consideration of the risk it poses to the reliability of the nation’s electricity supply.

Further rubbing salt in the wound, the Clean Power Plan will have no measurable impact on global temperatures, the alleged reason for the rules. That’s not an opinion, but a fact even EPA Administrator Gina McCarthy affirms. Testifying before the Senate Committee on Environment and Public Works, McCarthy said the Clean Power Plan “really [is] an investment opportunity. This is not about pollution control.” Obama amazingly claims the rules won’t increase electricity prices. But he’s notably not making any promises though that “if you like your current electricity bill, you can keep it.”

This piece originally appeared in The Daily Signal