Murkowski: FERC Responses Raise New Concerns About Reliability

WASHINGTON, D.C. – Sen. Lisa Murkowski, R-Alaska, today said she remains concerned about the impacts that new regulations by the Environmental Protection Agency could have on the reliability of the nation’s power grid.

In May, Murkowski asked the Federal Energy Regulatory Commission, which is responsible for reliability, to explain how the commission is working to ensure that EPA’s new regulations do not adversely affect reliability. FERC’s responses, which arrived Monday in the form of three separate letters from different members of the commission, prompted the following response from Murkowski:

“EPA’s rulemakings could have a serious impact on the affordability and reliability of our nation’s energy supply, especially given the sheer number of new regulations the agency has rolled out in such a short time period.

“I was somewhat reassured last year when Chairman Jon Wellinghoff outlined plans for an interagency task force to address this important issue. Although I was concerned about the transparency of that effort, I was hopeful it would provide FERC with an opportunity to inform the rulemaking process through a thoughtful and thorough analysis of potential consequences.

 “In May, I sent a letter to FERC seeking to clarify its collaboration with EPA on regulations that could force the shutdown of a significant portion of the nation’s coal-fired electricity fleet. I asked a number of questions to determine whether the commission was doing its part to monitor and protect electric reliability in this turbulent regulatory landscape. Having received FERC’s responses this week, I must say that I am now less confident of that being the case. 

“The commission’s staff has preliminarily estimated that up to 81 gigawatts of existing generation are ‘likely’ or ‘very likely’ to be retired as a consequence of new EPA rules. That’s nearly 8 percent of our installed capacity for electric generation and a retirement at that scale could have drastic consequences for many parts of our country.    

“Equally concerning is FERC’s admission that it has not completed a full reliability study – only an informal, preliminary analysis. There is no indication that FERC plans to press ahead and complete such a study. Instead, Chairman Wellinghoff’s letter suggests that ‘the planning processes used by utilities to identify and plan for the infrastructure and resources they will need are the most appropriate vehicles for this analysis.’ If this is true, more time will be required to complete such planning processes.   

“I continue to believe that FERC is in a good position to provide the information needed to answer these questions, but it’s highly unlikely that it could be possible under the timeframe EPA has established for its regulations. We must ensure that FERC is able to weigh in on any reliability concerns that arise, and we must be sure that the information in these letters and anything else that emerges can be made a part of the record on EPA’s rulemakings.”

Murkowski said FERC’s responses ultimately raise more questions than they answer, including:

  • Should utilities or FERC be responsible for reliability analyses, and when will those analyses be completed? 
  • Why has FERC not conducted its own formal study or sought to have utilities complete that work, especially in light of EPA’s aggressive regulatory schedule?
  • Why did FERC opt to proceed informally in light of the seriousness of the matter and its impact on matters within the Commission’s jurisdiction?
  • Is it possible to definitively state that reliability is not jeopardized by EPA’s rulemakings?
  • What process will facilitate access to information that FERC says it currently lacks?

Copies of the FERC Commissioners’ letters to Sen. Murkowski are attached, as is her original letter to FERC.