Grid Managers Seek Compliance Cushion for Coal-Fired Generators
The State Journal
25 November 2011
By Pam Kasey
As the Environmental Protection Agency begins to enforce broad new
air pollution regulations over the coming several years, some
coal-fired power plants will be retired and others will power down
for retrofit.
PJM Interconnection and regional electric grid managers across the
nation are making a proposal to help ensure electric reliability
through the period.
Although PJM so far believes that transmission upgrades will
address any reliability impacts, "we know better than to simply
gamble on this outcome without providing an appropriate safety
valve for changed circumstances," reads a written statement from
Michael Kormos, PJM senior vice president of operations.
Kormos will argue for a "Reliability Safety Valve" at a Nov. 29-30
Federal Energy Regulatory Commission Reliability Technical
Conference in Washington, D.C.
Coal-fired power plants provided half of the electricity in 2010
in PJM's region, which encompasses all or parts of 13 states and
Washington D.C., including West Virginia.
Many coal-fired power plants will be affected by the coming Cross
State Air Pollution Rule and National Emission Standards for
Hazardous Air Pollutants, also known as the Mercury and Air Toxics
Standards.
The problem for the regional grid managers is this: While they are
tasked with maintaining grid reliability, they cannot order a
generating unit to stay in operation if an operator chooses to
retire it. Electric reliability could be severely compromised as
operators come into compliance with the new rules.
PJM and other grid managers have some tools available to them,
according to Kormos' testimony. These include arranging
compensation for generators that otherwise would retire,
coordinating and approving the schedule of generator outages
resulting from retrofitting, and ordering transmission owners to
upgrade their systems for reliability purposes.
But while PJM has not yet foreseen problems, delays in
transmission upgrades or a bottleneck of vendor orders for
generator retrofits are unpredictable risks.
"The number of potential retirements and retrofits, and the tight
timeframe associated with same, could be unprecedented in scope,
thus ‘stress testing' these tools to a degree to which they have
not been utilized before," Kormos will testify.
The grid managers' "Reliability Safety Valve" proposal seeks EPA
flexibility, under certain conditions, on compliance timing and
penalties.
The proposal provides incentives for owners of generating units
deemed critical for reliability to give two years' notice of their
intentions so PJM can plan and order needed transmission
reliability solutions.
Such notice would make owners eligible for relief from penalty if
PJM requires a unit to run beyond the compliance date, while unit
owners who fail to provide notice would not be guaranteed relief
from penalties.
"In short, the two years' notice that we proposed avoids unit
owners potentially profiting from their own failure to provide
notice by leaving PJM little time to order the necessary
transmission reliability upgrades that would allow for the timely
and reliable retirement of the unit in question," Kormos'
testimony reads.
EPA needs to provide up-front guidance in its final rule as to how
it will exercise its penalty authority, he will testify.
"This would ensure that a unit owner doesn't find itself faced
with the Hobson's choice of being asked by the (grid manager) to
operate for reliability while, at the same time, facing potential
penalties for doing so by the EPA or, more likely, the
implementing state environmental regulatory authority," he will
say.
For more information about the Nov. 29-30 FERC reliability
conference or to view a webcast, visit FERC's calendar page on the
conference.