Policy

Bipartisan U.S. senators air EPA power plant rule concerns amid reliability risks

A bipartisan group of U.S. senators came together for an electric reliability hearing to share concerns about meeting the rising demand for electricity from the tech sector, particularly as new EPA rules would push baseload coal and natural-gas power offline earlier.

In a Tuesday hearing for the Senate Committee on Energy and Natural Resources, senators asked four witnesses, including American Electric Power’s interim CEO Ben Fowke, about load growth in the U.S. compared to China, and the importance of baseload power to meet those energy needs.

“I am a big proponent of renewable energy,” Fowke said, adding that by continuing to add intermittent resources like solar and wind power to the grid, “at some point, the value of that renewable energy diminishes and the value of integration increases,” creating a need for resources like coal-fired power plants.

The tech sector, from data centers to the high energy need to develop AI applications, has greatly increased the demand for electricity: a 2023 estimate from the North American Electric Reliability Corporation shows 90 gigawatts (GW) of demand growth by 2030.

“Let me be clear: this load growth is the opportunity of a generation and it’s ours to lose,” Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) said.  “The reason we have this growth is that industries which will define the 21st century — chips, AI, advanced manufacturing — are tripping over one another to build in America, they’re coming from all over the world.”

Senators and witnesses testifying on behalf of the electric sector and U.S. manufacturers called the latest policy to reduce greenhouse gasses from existing power plants overly stringent.

The EPA’s rules package would have coal-fired and natural gas-fired power plants reduce 90% of their greenhouse gas pollution in less than 20 years, and would impose stricter limits and restrictions on coal ash and mercury emissions from coal-burning power plants. To keep the plants running, carbon capture and sequestration would need to be implemented, although some criticize CCS technologies for being energy-intensive and expensive. 

“EPA is a big fan of CCS,” Fowke said, referencing AEP’s own experience with CCS pilots. “It’s not a proven technology today, nor is the infrastructure to move the carbon, to sequester it, available.”

Fowke’s testimony took place before the Edison Electric Institute (EEI), which represents AEP and other investor-owned utilities, formally challenged the EPA rule. EEI filed a petition for review in federal court of the Clean Air Act Section 111 rules, which would become effective on July 8.

Ranking Member John Barrasso (R-WY) pointed out that China’s tech boom is being enabled in part by coal power. Since the Paris Climate agreement in 2015, China added 262 GW of coal-fired generation, while the U.S. has shut down over 100 GW of coal resources, he said.

“When America’s AI developers need power, will it be enough, will it be reliable, will it be affordable?” he asked.

“If America can’t build the energy infrastructure needed to support these industries with reliable and affordable power, we will be forfeiting the opportunity to be at the forefront of the technologies of the future and cede control to China and other nations that we cannot necessarily trust,” Sen. Manchin said.

Sen. Manchin also cited the recent summer reliability report from NERC, which says half of the country has an elevated risk of blackouts this summer. The EPA rules could force baseload resources offline in the near future, further increasing the reliability risk.

AEP, for instance, would have to ultimately turn to state commissioners and create plans for retiring some coal resources by 2032 under the new rules, Fowke told the senators.

“Even though we all appreciate and want to be good stewards of the environment, the EPA rules that recently came out further complicates a tenuous situation on our grid,” Karen Onaran, President and CEO of the Electricity Consumers Resource Council (ELCON), said in her testimony. 

ELCON represents some of the largest industrial consumers of electricity, and supports the bicameral bill Expediting Generator Interconnection Procedures Act of 2024, H.R. 8085 and S. 4190, through which Congress would instruct the Federal Energy Regulatory Commission to make more aggressive reforms to ease interconnection backlogs.

Besides asking Congress to work with regulators to prevent early retirements of dispatchable power plants, AEP’s interim CEO also asked the senators to encourage efforts from FERC for regional and interregional transmission development.

Earlier this month, the Federal Energy Regulatory Commission approved two transmission laws that experts agree will advance transmission planning across states in the long-term. The rules do not address the interconnection queues or interregional planning.

“Do any of you believe that the FERC rules took care of our permitting problems that we have getting things built, especially transmission or pipelines?” Manchin asked the witnesses. “Nobody believes that it cured it? Nobody. OK.”

Manchin urged the witnesses to reach out to the Biden administration, and to White House Deputy Chief of Staff John Podesta, regarding the need to advance new transmission projects.

 

Iulia Gheorghiu

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