Congress can support America’s energy expansion by acting on three key energy priorities after the August recess – permitting reform, EPA rulemakings, and recognizing the role of dispatchable power generation assets while supporting competitive power markets are essential to serving the nation’s energy needs.
Although the relative quiet of the August recess has arrived on Capitol Hill, July was a reasonably fruitful time for energy policy, with members in both chambers focused on substantive policy issues critical to electric grid reliability and the energy expansion. Even as Congress catches its breath over the next few weeks, EPSA hopes that the momentum from July can be sustained on several critical policies in the coming months.
On July 16, Republican leaders of the House Energy and Commerce Committee (E&C) outlined their concerns to the Federal Energy Regulatory Commission (FERC) regarding the reliability effects of both projected load growth and the loss of dispatchable generation due to rulemaking from the Environmental Protection Agency (EPA). E&C welcomed all five FERC commissioners for an oversight hearing the following week, and the Senate Energy & Natural Resources Committee approved a permitting reform package on a strong bipartisan vote.
When Congress reconvenes after Labor Day, lawmakers will be intently focused on passing temporary spending bills to keep the government operating after the end of the fiscal year, and certainly the specter of November’s elections will hang over many policy discussions. But Congress still has an opportunity to make legislative progress or continue important oversight responsibilities on key energy issues before the end of the year.
EPSA Continues to Highlight the Importance of Improving the Permitting and Siting Processes
Congressional hearings on May 21 and June 4 helped raise awareness and explore the challenges of the projected increases in electricity demand. Load growth, and the energy expansion in general, will require significant investment in dispatchable and renewable generation, energy storage, fuel supply infrastructure like natural gas pipelines, and electric transmission, distribution, and storage.
EPSA supports permitting reforms that will bring efficiency and certainty to the permitting process. Critical energy projects cannot be endlessly bogged down in litigation and EPSA is pleased that judicial reform, among other important efficiencies, has been a priority for many members of Congress. EPSA supports reform efforts that recognize the value of a broad array of energy assets to the nation’s reliability needs and policy goals without compromising critical environmental protections.
EPSA Remains Concerned About Adverse Reliability Impacts From Ongoing EPA Rulemakings
Natural gas power generation remains the workhorse of the nation’s electric grid (producing 43% of the nation’s electricity in 2023) and will be the backbone of electricity generation in the U.S. for many years. The importance of natural gas generation to electric grid reliability – including a gas plant’s ability to be flexible, ramping, and load-following no matter the time of day – cannot be overstated.
The EPA’s New Source Performance Standards final rule on existing coal and new natural gas plants was finalized in April (the DC Court of Appeals is working on timing of oral arguments while an emergency stay request remains before the Supreme Court). In March the EPA initiated a separate non-regulatory docket focused on potential additional emissions regulation on existing natural gas plants, with a proposed rule expected to be released in December.
EPSA urges significant scrutiny of any federal regulations that limit output from (or result in the retirement of) existing dispatchable power plants. In FERC Commissioner Mark Christie’s testimony before E&C in July, he succinctly notes that our country “is heading for potentially catastrophic consequences in terms of the reliability of our electric power system… On the power supply side, dispatchable generating resources, even with many years of useful life remaining, are retiring far too quickly and in quantities that threaten our ability to keep the lights on” (emphasis added). Given both the difficulties in permitting and interconnecting new generation, and the importance of meeting future load growth, reducing the useful life of viable power plants is unwise.
EPSA has submitted substantive, detailed concerns to the EPA about the use of carbon capture and sequestration as the Best System of Emissions Reduction on a nationwide, commercial scale, particularly relating to challenges to building CO2 pipelines and appropriate storage repositories across the country.
Competitive Wholesale Markets Have Demonstrated Results in Protecting Ratepayers and Driving Innovation
While perhaps not a specific policy issue for Congress, competitive wholesale markets remain the best foundation to achieve the reliability and policy goals important to policymakers and regulators.
A reliable and efficient energy expansion will require significant investment in a range of infrastructure. Properly structured competitive wholesale markets will drive investment in essential resources and ensure that electric grid operators have sufficient capacity with desired attributes (e.g., dispatchable/flexible, carbon free, etc.). In regions harnessing the benefits of competitive markets, there is no guaranteed rate of return that provides immunity from investment that does not serve the needs of grid operators or regional planners. Efficiency and innovation are rewarded, while investment in assets not valued by the region does not have the luxury of recovering the costs via a safety net provided by captive ratepayers. Competitive markets provide clarity and transparency into the system planning process and instill confidence that asset owners are bearing the risk for those investments.
Every region in the United States will need to invest in new energy infrastructure. EPSA firmly believes that to meet the demands of the clean energy expansion that the energy industry will need to embrace “both/and” solutions – “either/or” silos are detrimental to reliability and environmental goals. EPSA members are building wind, solar, and storage assets and have a demonstrated track record of investing in carbon capture and sequestration programs. However, as carbon free resources comprise a greater share of our national electricity production, and the potential volatility of renewable energy output continues to expand, we hope that Congress recognizes the vital role that dispatchable assets will continue to play. We must not be cavalier about how important assets like natural gas power plants are to keeping the lights on.
