Report: Clean Power Plan not a threat to Midwest reliability

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

MILWAUKEE — A report by consultants at the Analysis Group concludes the sprawling area served by the MidContinent Independent System Operator shouldn’t see reliability problems as a result of the U.S. EPA’s Clean Power Plan.

“We think the region is generally well-positioned to be OK,” said Susan Tierney, senior adviser at Analysis Group, said during a presentation Tuesday afternoon at the Mid-American Regulatory Conference here. “The industry is going to be able to comply in [MISO] very capably.”

Utilities and states within MISO’s footprint, including Wisconsin, have expressed concerns about EPA’s proposal issued just over a year ago. Among them is worry that the plan to curtail carbon dioxide emissions could lead to premature closure of coal-fired power plants and jeopardize the stability of the grid.

So why is MISO well-equipped to handle the transformation of the industry anticipated when and if the Clean Power Plan is implemented?

First, the Carmel, Indiana-based grid operator is already undergoing significant changes as a result of relatively low natural gas prices and EPA’s Mercury and Air Toxics Standards, which is expected to result in the retirement of thousands of megawatts of coal-fired generation within MISO. There’s also continued wind development in the Upper Midwest, as well as billions of dollars of new transmission.

The report also notes a “strong culture of practice and planning” in MISO states to help to ensure reliability is maintained, as well as a history of “culture of collaboration” in the region.

Tierney, a former assistant secretary for policy at the Department of Energy, ticked off a list of parties and processes that will help ensure reliability is maintained. They include the 10-year assessments by the North American Electric Reliability Corp., long-range planning required by state utility commissions and MISO’s own resource adequacy surveys.

Some critics of the Clean Power Plan have cited recent MISO’s resource adequacy surveys showing generation capacity shortfalls within certain subregions, or zones, of MISO’s 15-state footprint, including Michigan’s Lower Peninsula.

Tierney said shrinking reserve margins are something MISO will have to address regardless of the Clean Power Plan.

“Reliability assurance is a job right now and will continue to be a job,” she said.

But EPA’s proposal shouldn’t affect the ability of states to meet even near-term carbon reduction targets, which Tierney expects will be more gradually phased in when EPA releases the final version of the rule this summer.

“There is a variety of practices and procedures by different players to provide long-term and immediate assurances that the lights will stay on,” she said.

The report released Monday is the third by the Boston-based Analysis Group looking at reliability and the Clean Power Plan. Previous reports drew similar conclusions about the threat to reliability nationwide and within the PJM Interconnection (E&ENews PM, March 16).

While the reports have concluded the Clean Power Plan isn’t a threat to reliability, Tierney told utility regulators and others at the conference that the close examination of the issue is healthy.

Concern about reliability “has been a hallmark of environmental regulations,” she said. “There’s a lot of hand wringing appropriately about whether reliability will be jeopardized.”

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