The Supreme Court’s recent decision empowering the Environmental Protection Agency to regulate carbon dioxide shifted momentum toward a mandatory program to cap greenhouse-gas emissions....
EPA, mercury and electric reliability.
possible and not necessarily incompatible solutions.
Under one model, the Edison Electric Institute had urged EPA to grant a blanket one-year extension—four years for compliance instead of three—for all units intending to retrofit. The president then would have authority granted to him under Clean Air Act sec. 112(i)(4) to allow two additional years for compliance—six years in total—for utilities making good-faith efforts to comply, but where technology wasn’t available for installation due to delays in permitting, financing, equipment availability, etc., and where extension was consistent with a state-approved integrated resource plan, or where the NERC or the appropriate RTO or state PUC determined that an extension of time was needed to address reliability issues. (See, Written Statement of Dominion CEO Thomas Farrell, FERC Docket RC11-6, filed Nov. 22, 2011.)
By contrast, five of the nation’s six RTOs—all but New England—had filed comments with the EPA last August recommending a narrowly drawn reliability “safety valve” procedure, such that a retiring generator could be granted an extension of time needed to implement reliability solutions to replace the subject resource through some sort of open process leading to a pro forma consent decree, or perhaps. (See, Joint Comments of ERCOT, MISO, NY ISO, PJM, and SWPP, FERC Docket AD12-1, filed Dec. 9, 2011.)
The debate over these two alternatives centered on two problems. First, what role would FERC play under the safety-valve option? Second, would an extension in either case expose a plant operator to civil liability for violating the Clean Air Act, even while running to preserve reliability?
Such concerns stemmed largely from the past experience of Mirant—now GenOn Energy—involving the Potrero plant in San Francisco in 2001, and the Potomac River plant in Alexandria, Va., in 2005. In each case, Mirant had won approvals from federal regulators to run to assure reliability, but was held liable for damages or penalties and fines in the form of citizens’ lawsuits—the Potrero case—or state enforcement of environmental laws—at the Potomac River plant.
Debra Raggio, assistant general counsel and v.p. for government and regulatory affairs at GenOn, explained how Federal Power Act sec. 202(c) allows the DOE to direct a generating plant to operate to ensure reliability in cases of war or emergency. But while that section in fact creates a reliability safety valve, it offers no immunity from liability under environmental laws. To avoid any penalty for unauthorized emissions, the owner must shut down—even though a “knowing and willful” violation of a must-run order could land the owner behind bars. So when Wellinghoff asked her opinion of section 202(c), Raggio felt herself cornered:
“I’m having to say which thing I want, penalty or jail.”
The problem involved legislative interpretation: “Our legal advice directs us that the Clean Air Act actually would trump the Federal Power Act … because there is no carve-out for reliability in the Clean Air Act, which came after.
“My personal opinion is: nobody thought of this.”
The safety valve idea also would beg the question of how many hours a unit would be allowed to run if it should