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Baghouse Bottleneck

EPA, mercury and electric reliability.

Fortnightly Magazine - February 2012

qualify for a reliability exemption. Would the plant then earn the right to qualify for economic dispatch in any hour, to earn market revenues and cover costs, or would it be limited to running only in those few hours crucial to reliability? Could EPA force a safety-valve plant to curtail its run times to minimize health risks from the resulting emissions?

And what agency would make the safety valve finding? Commissioner Moeller, for one, questioned how FERC might make the process work, since the ultimate decision of whether a generator could qualify for a waiver of the MATS compliance deadline would remain EPA’s call, with NERC and FERC able only to give expert advice to EPA.

In fact, just last month the FERC denied a petition by the South Carolina Public Service Commission that had asked FERC to create a joint federal-state board to study the impact of EPA rules on reliability and affordability of electric power in the Palmetto State. FERC ruled that the petition failed to identify any matter “cognizable under Part II of the Federal Power Act.” (Docket EL11-62, Jan. 19, 2012, 138 FERC ¶61,040.)

Above all, many at the conference felt that any safety valve option would depend primarily on generators providing timely notice of their retirement or retrofit plans—at least two years’ notice, for example, under the RTO safety valve proposal tendered to EPA.

At one point Commissioner La Fleur asked how much advance knowledge planning authorities typically have about when a power plant owner might be thinking of retiring a unit, and whether FERC should consider reviewing rules governing plant retirements.

According to PJM’s Kormos, an RTO often has information about generator plans, but “we just can’t go public with it.”

Yet a generator who bids in an RTO forward capacity market surely is revealing something about future plans, and Kormos acknowledged that when PJM puts a grid upgrade in an upcoming RTO transmission expansion plan, “we have to state what the need is,” which also tends to reveal generator intentions.

And when pressed by Commissioner Norris, Kormos appeared optimistic:

“We’re working with our generation owners. I think … that if we went to them and said we need to pull the trigger now; we need you to let us announce you’re going to retire this unit … my guess is right now, based on our history, they would let us, and they would work with us to do that.”

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