Although most people don’t think much about electricity, nobody likes to lose power. Keeping blackouts at bay is no doubt a stressful job. So we can imagine how the people at the North American Electric Reliability Corporation, the nonprofit organization responsible for ensuring the dependability of the electric grid across the US and Canada, might lose the occasional night’s sleep over it.
But a new report just released by NERC detailing the organization’s forecast for grid reliability unfortunately draws conclusions about proposed EPA air and water regulations that have gotten some members of Congress – those who swear by the questionable equation that “EPA + Regulation = Job Killing” – indefensibly excited. There have been other great overviews of why NERC’s new report in fact doesn’t support the knee-jerk reaction that environmental goals can’t be met without compromising electric reliability. Instead, we're going to focus here on one of our favorite topics that just so happens to be a big part of NERC’s analysis: regulating power plant cooling water withdrawals and the resulting impacts on fish and other aquatic life.
And, well, some of NERC’s conclusions are off-base.
To start off, it’s important to understand that the draft cooling water rule the EPA released this summer was weak. Really weak. In essence, the EPA provided no national standard for cooling systems at existing power plants. So those plants that still rely on outdated once-through cooling have little reason to upgrade to closed-cycle cooling, which reduces water withdrawals and fish kills by 95 to 98 percent. Instead the EPA said it’s up to the states and their understaffed and overstretched agencies to review power plant water withdrawal permits on a case-by-case basis, much as they do now. That means the endless cycle of permits and litigation will continue, and the nation’s bodies of water remain essentially unprotected.
One would think this weak rule would mean that few power plant owners would be forced to spend any money upgrading their plants' cooling systems. NERC, oddly, finds otherwise, and there are two big flaws in their analysis that help explain why.
First, NERC overestimated how many plants would actually be required to install closed-cycle cooling systems. The report claims that NERC analyzed a “full spectrum” of potential outcomes from the cooling water rule, but in fact it only examined scenarios where 75 to 100 percent of power plants would install cooling towers. Um, no. That is far beyond what EPA is actually requiring because the agency’s draft rule is very clear about not mandating closed-cycle cooling at all plants. So unless the power industry is going to install cooling towers at all 670 power plants subject to this new rule because they think it’s a fabulous idea, NERC describing its analysis as “full spectrum” is just a fantasy.
Second, for some reason FERC seems to thinks EPA is giving power plant owners too much time to comply with the proposed cooling water rule. Why else would they use 2018 as the deadline in its analysis? EPA’s phased-in deadline is much more industry-friendly, giving fossil fuel plants between 2018-2022, and nuclear plants 2023-2027, in which to fall in line.
As a result of these two miscalculations, NERC overestimates how many power plant owners would choose to shut their facility down rather than spend the money to install cooling towers. Curiously, if you look back at NERC’s 2010 analysis, the organization estimated that up to 36 gigawatts of electricity generation would be retired because of the cooling water rule. But after EPA’s decidedly weaker-than-expected cooling water rule was released, NERC ‘s 2011 report estimates that up to 39 gigawatts could be retired. So a weaker rule means the same if not more power plants might shut down? That doesn’t add up.
So what might the impact of EPA’s rule really be? The agency itself estimates that between 1.05 and 17.1 gigawatts of electricity generation could be retired, the latter number based on the strictest possible scenario (which the EPA has made clear it will not pursue).
We don’t blame NERC for being a little apprehensive about the impacts of new power plant regulations, but the organization’s report reads more like an analytical anxiety attack. Maybe they need to take a deep breath and revisit the actual requirements of the proposed EPA rule before they freak everyone else out.