Cadwalader: Murkowski Seeks Answers from FERC on EPA Regulation's Impacts on Reliability

Cadwalader: Murkowski Seeks Answers from FERC on EPA Regulation's Impacts on Reliability

By Ken Irvin and Sohair Ahmadi

Following testimony of the Commissioners of the Federal Energy Regulatory Commission ("FERC" or "Commission") on September 15, Senator Murkowski (R-AK) sent FERC Chairman, John Wellinghoff, several intense follow-up questions regarding the potential impact of the regulations of the Environmental Protection Agency ("EPA") on electric reliability.[1] Expressing palpable pique in her cover letter, Senator Murkowski tells Chairman Wellinghoff that his "statement that the Commission's staff has not conducted 'any full studies' of the reliability impact of the rulemaking initiatives of the [EPA] that were the subject of [her earlier letter] was frankly startling."

Senator Murkowski questioned Chairman Wellinghoff's testimony before the House Subcommittee on Energy and Power where he stated that the EPA rules should not be delayed and that there are already sufficient processes in place to address reliability.  She requested that the Commission, in coordination with the North American Electric Reliability Corporation, "immediately initiate and complete within six months a formal process that will address these vital reliability issues in a transparent and fair manner."  Senator Murkowski rejected as unsuitable the Commission's proposal to grant waivers or exceptions for certain plants, on a case-by-case basis, after the EPA rules are in effect because such process, Murkowski contended, could not substitute for the needed studies that the Commission should undertake prior to implementation of the EPA rules.

To illustrate her point, Senator Murkowski directed Chairman Wellinghoff to provide "detailed answers" to several questions, including:

  • § Will the EPA's rulemaking agenda, as described in my previous correspondence, degrade reliability in any region, sub-region, or electric control area of the United States?
  • § In [FERC's] view, what is the extent of the Commission's responsibility to ensure the reliability and security of the nation's bulk power system?
  • § As a matter of public policy, do you believe that federal regulations should be generally applicable?
  • § Do you intend to involve the Commission in the EPA's rulemaking process sufficiently to ensure that EPA's rules, in fact, can be generally applicable without a threat to reliability?
  • § Explain how the Commission will carry out its statutory obligations with respect to reliability and security in the absence of information regarding expected material degradations to reliability.

Senator Murkowski's concerns regarding reliability stem from worry that compliance with EPA's pollution controls will force companies to retire significant generation capacity -including units that serve critical reliability needs.  She analogized retirements resulting from EPA regulations to the September 8 blackout in Southern California, which was supposedly caused by one isolated event.

Against that backdrop, NRG Energy announced that it expects to comply fully with the EPA Cross-State Air Pollution Rule without closing any plants.[2] Echoing the contention of Exelon in the litigation Homer City commenced against the EPA,[3] NRG Energy said it expects to do so by increasing scrubber efficiency and burning more low- sulfur coal, both of which result in lower pollutant emissions:  "Complying with these caps will be difficult, but we anticipate from our early analysis that NRG can comply through an integrated strategy," Reuters quoted NRG spokesman David Knox as saying.[4]

For more insight, contact Ken Irvin or Sohair Ahmadi.

[1] Senator Murkowski's letter is available at

[2] NRG's Texas coal plants able to meet new air rule, Reuters, September 27, 2011, available at

[3] Exelon motion to intervene, available at

[4] Supra n. 2

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