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Washington Week: Comments due on EPA new plant carbon rule, FERC to meet

The U.S. Environmental Protection Agency's planned overhaul of greenhouse gas standards for new power plants will take a step forward this week, with comments on the proposal due March 18.

The proposed rule, which the agency released in December 2018, would raise the maximum limit on carbon dioxide emissions from new and reconstructed fossil fuel-fired plants from the standard set under former President Barack Obama. The Obama-era rule effectively required any new facility to install carbon capture and sequestration, or CCS, technology in order to meet its emissions limit.

Many power industry groups balked at the mandate and have welcomed the Trump administration's more lenient replacement.

"The proposal correctly surmises that partial or full [CCS] is not a 'Best System of Emission Reduction' (BSER) under which new source performance standards for CO2 emissions can be established," the National Rural Electric Cooperative Association said in comments the group plans to file with the EPA. "CCS is not commercially proven, broadly geographically available and cost reasonable, thus it cannot be considered BSER."

Also on March 18, the EPA will hold a public hearing on its decision to rescind the legal basis for the Obama-era Mercury and Air Toxics Standards, or MATS. In December 2018, the EPA proposed revoking the Obama administration's finding that its MATS rule was "appropriate and necessary," saying that only the rule's direct benefits from mercury reductions should be considered in the regulation's cost-benefit analysis.

Despite the new finding, the EPA did not propose to modify its existing MATS performance standards, which the power sector has already largely satisfied.

FERC to mull transmission ROE

The Federal Energy Regulatory Commission will hold its next monthly open meeting on March 15.

FERC's agenda includes two orders launching new inquiries: one on the agency's electric transmission rate incentive policy, and the other on its policy for determining the appropriate return on equity, or ROE, for jurisdictional electric utilities.

During a speech in February, FERC Chairman Neil Chatterjee said he plans to have the agency take a "holistic look" at its transmission policies, including by revisiting the commission's Order 679 for providing transmission development incentives. That order offers incentives for projects with demonstrated risks, but Chatterjee questioned whether the goal instead should be to foster transmission that provides the greatest benefit to consumers.

On the ROE issue, FERC outlined a proposed policy in October 2018 that would set transmission ROEs using several different models rather than relying solely on the discounted cash flow methodology. The approach would create a wider band of acceptable ROEs, making room for a higher total return after incentives are added. Chatterjee announced in November 2018 that the commission would be reviewing whether to make additional changes to its calculation of base ROE and transmission incentives.

Also on the agenda is an order on NextEra Energy Transmission LLC's planned acquisition of a 53-mile, high-voltage direct-current underwater transmission cable system in California that supplies approximately 40% of the daily power used by San Francisco and surrounding areas.

Budget details still in the wings

The Trump administration released a summary of its fiscal year 2020 budget request to the U.S. Congress on March 11. The proposal sought to cut the U.S. Department of Energy's spending by 11% and would slash the EPA's budget by 31%.

Funding details for FERC have yet to be released but could come out the week of March 18. FERC recovers the full cost of its operations through annual charges and filing fees assessed on the industries it regulates, meaning its net U.S. budget appropriation is zero. But the White House's budget request could signal priorities for FERC, including a potential bump in spending authority for additional staff to help work through a backlog of LNG export applications.

ACORE renewable forum set

The American Council on Renewable Energy will hold its Renewable Energy Policy Forum in Washington, D.C., on March 20.

Speakers will include FERC Chairman Neil Chatterjee and Washington Gov. Jay Inslee, who is running in the Democratic primary for the 2020 U.S. presidential race.

Congress on break

Both chambers of Congress are out of session the week of March 18, but a high-profile energy item will be on tap when they return.

U.S. Senate Majority Leader Mitch McConnell, R-Ky., filed a cloture motion before the break on the Green New Deal resolution, which seeks to transition the U.S. entirely to clean, renewable or zero-emitting energy. Republicans oppose the measure and will almost certainly defeat it in the GOP-controlled Senate. But McConnell has pushed to hold a Senate vote to put legislators on the record about where they stand on the resolution, which critics say will cause energy prices to soar.

But the resolution's supporters say McConnell is trying to avoid debate on the proposal and that legislation to actually implement the Green New Deal has yet to be drafted.

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Federal agencies
March 18

The U.S. Environmental Protection Agency will hold a public hearing in Washington, D.C., on its proposed revised supplemental finding for the Mercury and Air Toxics Standards, known as MATS.

March 18

Comments are due on the EPA's proposed rule regulating carbon dioxide emissions from new coal-fired power plants.

March 21

The Federal Energy Regulatory Commission will hold its monthly open meeting at the agency's headquarters in Washington, D.C.

Industry events

March 19

The Global CCS Institute will host a conference on decarbonizing the U.S. economy.

March 20

The American Council on Renewable Energy will host its Renewable Energy Policy Forum in Washington, D.C.

Notable stories from last week

FERC chairman says commission can 'get things done' despite vacant seat

EIA expects coal-fired share of power generation to fall below 25% in 2019

Shell Oil executive urges US to retain methane emissions rules

Perry touts innovation, energy choice in CERAWeek speech

Plan to save Pa. nukes calls for zero-emission resource requirement

Renewables group blasts Trump's call to repeal 'energy investment credit'

Moderate Democrats voice misgivings with Green New Deal, developing alternative