U.S. Capitol Building at sunset, home of the United States Congress in Washinton, D.C., USA. Credit: iStock/lucky-photographer
As the trade association representing America’s independent power producers, EPSA looks at a new session of Congress as a valuable opportunity to promote policies that strengthen electric grid reliability and further our country’s clean energy expansion. EPSA members own and operate a diverse class of generation and storage assets that are critical to maintaining electric grid reliability and are actively participating in renewable and clean energy investments. And with the 2nd session of the 118th Congress well underway and the specter of the November 5 elections looming, EPSA remains focused on several key policy areas that it believes will help the nation improve electric grid reliability, affordability, and drive the clean energy investments critical to meeting climate priorities.
Don’t Give Up on Permitting and Siting Reform
The conventional wisdom says that legislating in a Presidential election year is a near impossibility, made even more difficult by narrow political majorities in the House and Senate. Couple that with House passage of H.R. 1 and difficulty agreeing on whether to include electric transmission policy in a permitting reform bill, and it’s difficult to see legislation passed on federal permitting reform this year. Even if the prospects of action in 2024 may be remote, EPSA will continue to advocate for a more predictable permitting process that ensures investors in all energy infrastructure an understandable, navigable, and fair process.
If there’s one common thread that will adversely affect all future energy investment, be it conventional and renewable generation, energy storage, electric transmission, and more, it’s an inefficient, unwieldly, and uncertain permitting process. New investment in dispatchable, firm generation (and the fuel supply or CO2 infrastructure to support those resources) will be affected, as will acreage-intensive renewable energy assets and the electric transmission to bring remote generation to load centers. EPSA believes that, as it relates to the need for energy infrastructure in our country, permitting reform is the lynchpin, and the status quo permitting regime will throttle the incredible potential for investment in all kinds of energy resources.
This can be achieved without compromising the critical environmental protections envisioned when the federal permitting process under National Environmental Policy Act (NEPA) was created. One of the most vocal supporters of permitting reform in Congress, and a staunch supporter of renewable energy development, is U.S. Congressman Scott Peters (CA-50). Congressman Peters has noted that when NEPA was enacted in 1970 it was (appropriately) designed as a defensive environmental statute. However, the need to build an increasing amount of energy infrastructure to meet our nation’s policy goals should lead supporters to view NEPA as an opportunity to lay the groundwork for critical infrastructure development.
Regulators Cannot Turn a Blind Eye When Their Rulemakings Create Substantial Reliability Concerns
There is a myriad of federal rulemakings currently underway relevant to the energy industry. Unfortunately, several of the rulemakings if adopted as drafted would severely degrade electric reliability at a time when the federal regulator (FERC), the nation’s Electric Reliability Organization (NERC), and grid operators across the country are warning about the further loss of dispatchable thermal resources.
Two examples are efforts by the Environmental Protection Agency (EPA) to further limit carbon emissions from coal and natural gas power plants, and by the Council on Environmental Quality to implement its “Phase 2” reforms to the permitting process under NEPA. The EPA rulemaking relies on two technologies – carbon capture and sequestration (CCS) and hydrogen cofiring – that will be part of the nation’s clean energy future, and several EPSA members are already using and investing in these technologies. They are both proven technologies with significant potential in the coming decades.
However, the industries do not exist on any semblance of nationwide commercial basis. Specifically, they do not have a substantial demonstrated track record of successful permitting, widespread investment, and development of a nationwide supply chain or skilled workforce. Yet the EPA relies on them as the keystone of the proposed rule, despite numerous hurdles to their development (outlined by EPSA). In the case of CCS, even if EPSA members can successfully capture the carbon, the transportation and storage of the carbon in geologically appropriate locations faces numerous meaningful challenges that disqualify the rulemaking as a reasonable assumption of potential investment in this country.
Holistic, Responsible Electrification Policies Must Include Ensuring a Sufficient Supply of Electricity
EPSA members represent roughly 20% of our nation’s generating capacity, including dispatchable thermal resources like natural gas, as well as wind, solar, and battery storage. Policy decisions, like those to electrify the transportation industry as well as residential and commercial heating, must be made in a holistic manner. Policy directives cannot be limited to the “fun” aspects of electrification, like government incentives for electric vehicles, charging stations, and heat pumps. Responsible policy must ensure that electrification efforts don’t outpace the ability of the electric grid to reliably serve additional demand driven by policy incentives.
Although it may be sacrilege for many electrification advocates to mention, any comprehensive electrification policy is inadequate without ensuring a sufficient supply of electricity to accompany the increase in demand.
Of course, this is not a comprehensive, definitive list of all the policy areas that EPSA will engage in throughout 2024. It is inevitable that a greater share of our nation’s electricity will be produced by renewable and clean energy resources. Over the next 10 and 20 years, renewable energy will continue to generate a growing percentage of the United States’ electricity on an annual basis.
However, it is not annual output that should concern policymakers and regulators. As resources that rely on the weather to generate electricity expand their role in the nation’s power production, we must ensure that enough dispatchable, firm generation remains viable for times when the weather isn’t cooperating. The old adage of “building the church for Christmas Eve Mass” has never been more apt. It may be easier to wax poetic about the clean energy expansion, but it’s critical that policymakers and regulators are willing to make the investments to ensure a solid foundation of reliability.