No Risk From EPA Coal Plant Shutdowns Grid Operator Says

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In contrast to recent widespread corporate media scaremongering about the lights going out because the Obama administration EPA is now finally forcing the dirtiest coal plants offline, a just-issued new report by the nation’s largest regional transmission operator PJM Interconnection says… Nu-uh.

Our power supplies are not threatened by the closings spurred by EPA ‘s finalized Cross State Air Pollution Rule (CSAPR) and proposed National Emissions Standards for Hazardous Air Pollutants (NESHAP), according to Clean Energy Report.

The two utilities that have squealed loudest about having to shut down old coal power due to “meddlesome EPA rules”, will have to shut down 7 GW by 2015. This will be the oldest and dirtiest power on the grid, long grandfathered-in under the more lenient EPAs of past administrations.

Because of the lousy cost/benefit ratio of trying to retrofit the very dirtiest oldest plants to meet EPA rules, American Electric Power, which already supplies the PJM grid, has to close 6 GW  and Duke Energy, which comes under PJM control by the end of 2011, will shutter 1 GW.

But PJM notes that the 7 GW loss is not a concern.

“even with almost 7,000 MW less coal capacity clearing for the 2014/2015 Delivery Year, PJM estimates the RTO will carry a reserve margin of 19.6 percent for the Delivery Year, including the demand and capacity commitments of [Fixed Resource Requirement] FRR entities.”

The report forecasts adequate — even improved — capacity margins, as dirty power is replaced by cleaner energy resources including wind, solar and natural gas.

One of biggest new resources cited is the creation of a little-noticed new FERC rule we covered last year by the Obama administration on “negawatts,” or new energy-efficiency agreements with large users such as demand response.

Large commercial users, who use as much as 17 million commercial customers use 40% of the power on the nation’s grid, can make a deal with their utility – and have big deductions in their electric bills in return – by agreeing to turn their electricity off for a few minutes, on demand, in order to shave peak demand, when it is necessary, such as on hot afterneoons. These rolling off-switches have virtually no impact on operations, because they are spread among big users.

Last year the Federal Energy Regulatory Commission (FERC) ruled that power not generated or “negawatts” are to be paid as much money per megawatt reduced as generated electricity is, per megawatt on electricity markets nationwide.

This new equal pay rule is revolutionizing the nation’s electricity markets, by giving utilities even in the “dirty states” incentives to save, rather than waste, energy – for the first time. Previously, Public Utilities Commissions have incented utilities to save energy only in progressive states like California.

Previously, utilities in many states, typically those with the dirtiest power, actually encouraged customers to waste energy, by charging big customers who save energy higher rates than those who waste energy. The new Obama administration FERC rule has reversed that incentive.

Susan Kraemer@Twitter

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