Chairs Rodgers and Duncan Press FERC on the Grid Impacts of EPA’s Clean Power Plan 2.0 Rule

Washington D.C. - House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Subcommittee on Energy, Climate, and Grid Security Chair Jeff Duncan (R-SC) today sent a letter to Federal Energy Regulatory Commission (FERC) Chairman Willie Phillips and the FERC Commissioners demanding information on how FERC is preparing for the devastating impacts that will be caused by EPA's Clean Power Plan 2.0 (CPP2.0) on the electric grid.

KEY LETTER EXCERPT:

"In addition to impermissibly infringing upon state responsibilities over electric generation, the EPA's final rule imposes unrealistic standards with unproven compliance strategies on existing coal-fired power plants and new natural gas units. Despite widespread warnings from stakeholders over the reliability catastrophe that could ensue from the rule, the EPA failed to address these concerns in the final rule and did not amend the rule to reflect the formal input of the Federal Energy Regulatory Commission (FERC) and North American Electric Reliability Corporation (NERC)."

"FERC is unique among federal regulators in having a mandate to ensure the reliability and affordability of the grid pursuant to the Federal Power Act. As Commissioners of FERC, you have the responsibility to carry out that mandate. As a result of this rule, FERC could be forced to intervene using available measures to prevent additional closures of dispatchable generators to prevent reliability and resource adequacy crises. How and when those measures are utilized could make the difference between maintaining an affordable and reliable electric grid or a future of rolling blackouts and unaffordable electric rates."

BACKGROUND:

• Under the Clean Power Plan 2.0, the EPA has mandated strict, costly, and untested standards on both new and existing natural gas and remaining coal generators.
• The Energy and Commerce Committee held hearings on June 6, 2023 and November 14, 2023 to discuss the harmful impact of the EPA's Clean Power Plan 2.0 (CPP2.0) on America's energy security and grid reliability.
• On June 6, 2023, Chair Rodgers led a letter to EPA from all Energy and Commerce Republicans on the agency's CPP2.0.
• On July 31, 2023, Chair Rodgers and former Subcommittee on Environment, Manufacturing, and Critical Materials Chair Bill Johnson (R-OH)sent a letter calling on the EPA to extend the comment period for their new CPP2.0 proposal.
• On November 7, 2023, Chair Rodgers, Subcommittee on Energy, Climate, and Grid Security Chair Jeff Duncan (R-SC), and former Subcommittee Chair Johnson sent a letter to the Federal Energy Regulatory Commission (FERC) on how new EPA regulations, including CPP2.0, would be detrimental to the U.S. electric grid.
• On November 14, 2023, Chair Rodgers, Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), and former Subcommittee Chair Johnson sent a letter calling on EPA Administrator Michael Regan to withdraw the overreaching and unworkable CPP2.0 proposal.

The Chairs requested Chairman Phillips provide responses to the following by July 30, 2024:

1. Please provide all communications between the Chairman, Commissioners, and FERC staff with the EPA administrator and EPA staff relating to the development of the proposed Clean Power Plan 2.0 rule.

2. Do any generators participating in the FERC-jurisdictional markets utilize carbon capture technology at a sustained capture rate of 90 percent? Do any generators participating in the FERC-jurisdictional markets use carbon dioxide pipelines to transport captured carbon dioxide?

3. Did FERC participate in the Office of Management and Budget's Office of Information and Regulatory Affairs interagency review process to weigh in on EPA's Clean Power Plan 2.0 rule?

a. If not, please explain why FERC did not participate in this process.

4. What plans does FERC have in place to work with jurisdictional organizations and stakeholders to prevent grid disruptions stemming from the Clean Power Plan 2.0? Please provide a detailed explanation of your plans and the stakeholders with whom you are working.

5. Section 202(c) of the Federal Power Act allows FERC, when it determines that an emergency exists, to "temporarily order connections of facilities, and generation, delivery, interchange, or transmission of electricity as determined to best meet the emergency and serve the public interest."

a. Do you expect that Section 202(c) will be needed to prevent blackouts and brownouts, as a result of the Clean Power Plan 2.0?

b. Do you believe that Section 202(c) is an effective tool to prevent blackouts and brownouts? If not, what specifically about the 202(c) process would need to change in order to make it effective?

c. What steps must you take to make the decision to trigger emergency measures under 202(c)? Please provide a detailed explanation of any requests or work pertaining to a 202(c) order, including with other federal, state, and private parties.

d. Section 61002 of the FAST Act, "Resolving Environmental and Grid Reliability Conflicts," amended Section 202(c) to clarify that an emergency order issued by FERC will override federal, state, and local environmental laws.

i. Have you discussed Section 61002 with the EPA or the Department of Energy?

ii. Please explain the substance of any such discussions.

6. A waiver under Section 202(c) allows a resource to operate for 90 days. Given that the Clean Power Plan 2.0 could create reliability and compliance issues over multiple years and have considerable impacts on the viability of the markets you regulate, is a new longer-term mechanism needed to maintain resources for reliability? Is a new longer-term mechanism needed to maintain resource adequacy?

7. Has FERC assessed the market impacts of the final rule and, if not, when will FERC do so?

a. How will this rule affect capacity and energy market prices?

b. How will these rules affect investment signals for new dispatchable resources, like natural gas? Will resources be able to recover the necessary revenues through the FERC-jurisdictional markets?

8. How does FERC propose to allow resources affected by the rule to retain necessary revenues in the market?

a. If resources affected by the EPA's rule are unable to compete in the relevant markets, what amount of resources will abruptly retire?

b. What impact(s) will this have on resource adequacy?

c. What impact(s) will this have on reliability, especially during peak conditions during summer and winter?

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