June 02, 2023

ICYMI — Manchin: This EPA Won’t Let Electric Reliability Inconvenience Their Anti-Fossil Agenda

Charleston, WV – Yesterday, the U.S. Senate Energy and Natural Resources Committee held a hearing to examine the reliability and resiliency of electric services in the United States in light of recent assessments and alerts. During the hearing, Chairman Joe Manchin (D-WV) discussed the importance of, and actions needed, to ensure electricity reliability and affordability. These actions include keeping critical generation sources like coal and natural gas , additional permitting reform for all types of energy projects, including those electric transmission lines needed for reliability, and enhancing the role the North American Electric Reliability Corporation (NERC) and the Federal Energy Regulatory Commission (FERC) play in ensuring that Environmental Protection Agency (EPA) regulations do not create a reliability crisis.

“There is no doubt that our electric grid is undergoing a transition, both in generation sources and in the types of demand the grid is called on to serve. But the speed of this transition must be balanced against reliability and affordability of electricity. We know much larger portions of our grid would have experienced blackouts during Winter Storms Elliott and Uri if our coal fleet was retired prematurely. During these storms, coal power was one of the most reliable energy sources. But this EPA won’t let electric reliability inconvenience their anti-fossil agenda. Within 6 months of Winter Storm Elliott, EPA’s response was to roll out four new regulations poised to shut down 50,000 megawatts or more of coal power over the next decade—whether the grid is ready for it or not. EPA is not hiding their strategy—it’s death by a thousand unreasonable cuts for fossil,” said Chairman Manchin.

Chairman Manchin also commented on the need to keep critical dispatchable electricity generation sources online:

“At its core, this is a simple math problem. We’re seeing more dispatchable resources shut down faster than new dispatchable resources are being added. We’ve seen over 90 gigawatts of coal power retire in the last decade, and we could see twice as much dispatchable capacity retire over the next decade on the path we’re heading down. And by dispatchable, I mean controllable and flexible to meet supply and demand. Right now, that includes coal, gas, nuclear, and hydropower. 

“In the future it’ll include renewables paired with storage, too. But the markets aren’t valuing dispatchable resources of any type properly to reflect the problem we have. And the buck stops at our grid operators like PJM, MISO and certain utilities who are required by law to ensure NERC reliability standards are met. Our markets have allowed renewables to receive the same payments as dispatchable resources without providing the same benefits to the grid. I want to acknowledge that PJM and other markets have recently taken initial steps to begin appropriately compensating the reliability benefits of different types of power plants, but much more is needed,” said Chairman Manchin.

Chairman Manchin discussed the need for FERC to have the authority to ensure that critical power plants aren’t retired early:

“I also believe FERC needs clear authority to keep these reliability-critical generators from prematurely retiring and to issue regulatory exemptions as necessary so that ratepayers aren’t being penalized just to keep the lights on. Because the impact of these collective EPA regulations is also a fairness issue. Take a coal plant as an example, which has already invested tens if not hundreds of millions of dollars on environmental upgrades like scrubbers, baghouses, and low NOx boilers—and now could be required to spend tens or hundreds of millions more, or else shut down.

“The investments already made have useful lives of decades, and ratepayers are going to be on the hook paying for them for decades whether the plant is shut down or not. Is this administration, which claims to be focused on equity, blind to the fact their policies are going to harm low-income ratepayers in a state like West Virginia by saddling them with unaffordable power while stripping them of reliable energy? For generators that must remain online for reliability, we must not penalize their ratepayers by requiring hundreds of millions of dollars in additional environmental controls that will not ever be recouped in the remaining life of the plant,” commented Chairman Manchin. 

During questioning, Chairman Manchin asked the witnesses about the need for FERC and NERC to have input in EPA regulatory decision making as it concerns electric grid reliability: 

“We have NERC, we have FERC, we have EPA. EPA seems to trump everything with policy if they’re going in a different direction, and it seems like there’s not much input. Do you all believe it’s necessary that NERC and FERC should have input as far as reliability when EPA is making these policy changes?” asked Chairman Manchin.

“Absolutely,” said Mr. David J. Tudor, Chief Executive Officer and General Manager, Associated Electric Cooperative Inc.

“Absolutely, I think this concept of reliability impact statements to inform policy before it is made is a great idea,” said Mr. Manu Asthana, President and Chief Executive Officer, PJM Interconnection, L.L.C.

Chairman Manchin continued, “How frustrating is it to you, being the head of NERC, knowing that you’re not picking winners and losers, not getting involved in environmental fights and dealing with the facts of how you’re supposed to deliver the power, and no one is paying attention?”

“It’s frustrating,” said Mr. James B. Robb, President and Chief Executive Officer, North American Electric Reliability Corporation.

Towards the end of the hearing, Chairman Manchin discussed opportunities for further permitting reform and stressed the need to include transmission in permitting reform measures.

“We’ve made some inroads, but this committee has an awful lot more to do on permitting, and I think everyone here has been intricate in playing that part. In a bipartisan way we can show in this committee how we can further our permitting process by continuing to keep our nose to the grindstone and getting this done as quickly as possible.

“Just a few things, first of all in this committee’s jurisdiction: electric transmission siting, cost allocation, interconnection queue reform, judicial review reforms for energy and mining projects, improving federal energy leasing for all types and sources, better community engagement and input on project development, ensuring FERC and NERC have necessary authorities to address reliability as we discussed today, and many other ideas we could consider that are priorities for members on both sides of this committee, including streamlining hydrogen infrastructure, hydropower licensing, mining law reform, streamlining LNG exports, and so much more,” said Chairman Manchin.

The hearing featured witnesses from the North American Electric Reliability Corporation, PJM Interconnection, L.L.C, Columbia Center on Global Energy Policy at Columbia University, Associated Electric Cooperative, Inc. 

To watch the hearing in full, please go to www.energy.senate.gov.

To watch a video of Senator Manchin’s opening remarks, please click here.

To watch a video of Senator Manchin’s questioning, please click here.