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New FERC chair assails Clean Power Plan in comments filed with EPA

Newly designated Federal Energy Regulatory Commission Chairman Neil Chatterjee has chimed in on the U.S. Environmental Protection Agency's Clean Power Plan, citing comments gathered by the commission before the carbon rule was modified significantly in response to that stakeholder input.

Chatterjee, who was speaking solely for himself and not on behalf of his agency or any of his fellow commissioners, also expressed concern that significant changes that have occurred in the power sector since the rule was finalized in 2015 "would make the reliability of the nation's bulk-power system even more susceptible to unintended consequences should the Clean Power Plan ultimately be implemented."

Submitting individual public comments on a matter pending before another agency is somewhat unusual for a FERC chairman, although FERC members testified at lawmakers' request during a July 2014 House subcommittee hearing on the potential reliability impacts of the then-proposed Clean Power Plan.

Chatterjee's comments, which were sent to EPA Acting Administrator Andrew Wheeler, were dated Oct. 31 — the same day the chairman told reporters that his second stint heading FERC would be far different from his first, which sparked fears that the independent agency was being politicized. Chatterjee, a Kentucky native, began his career at the commission as a strong advocate for the use of coal-fired generation.

Citing FERC's statutory responsibility to "keep the lights on," Chatterjee in his letter to Wheeler recounted that the commission held four public technical conferences on the potential impact of the Clean Power Plan in the lead up to the EPA's issuance of the final rule, which the U.S. Supreme Court in February 2016 held in abeyance. The chairman said he wanted to offer the EPA the benefit of the information the commission obtained over the past several years, such as that "a wide range of interests" said during the technical conferences that the Clean Power Plan could have significant consequences for reliability depending on how it was implemented.

What Chatterjee did not note, however, was that the EPA in its final rule made significant changes to its original proposal to address concerns raised during the technical conferences. Moreover, several FERC commissioners subsequently praised the EPA for participating in FERC's technical conferences and listening to the commission's concerns by making several substantial changes to the plan, such as modifying its implementation schedule, providing more flexibility and adding a reliability safety valve.

Nevertheless, Chatterjee said the criticism of the Clean Power Plan as it originally was proposed "should be accorded due consideration by the agency in formulating its policy."

"Any regulatory promulgation that will have profound effects on the bulk-power system should be supported by a detailed engineering-driven analysis of its impact on the scale or pace of generation retirements, the feasibility of sufficient replacement capacity, and any changes to the transmission infrastructure that may be required to sustain reliability as a result of those changes," Chatterjee continued.

Chatterjee noted that FERC has not fully analyzed how the EPA's proposed Clean Power Plan replacement — known as the Affordable Clean Energy, or ACE, rule — would impact the reliability of the bulk-power system, but said it appears to cure some of the potential deficiencies in the Clean Power Plan. He then offered to have commission staff use its expertise and resources to provide that analysis.

Finally, Chatterjee expressed concern that the Clean Power Plan, as originally proposed, "would have allowed the agency to impose sweeping changes in the composition of the nation's bulk-power system through administrative action without a clear statutory directive or limiting principle."

"Working together, we would expect to be able to devise methods of addressing climate change in ways that respect our respective statutory limits. To the extent the resolution of these issues presents an impassable 'regulatory gap' that neither agency can overcome while remaining within its bounds as a 'creature of statute,' then it may be necessary to request specific guidance from Congress through appropriate legislation," Chatterjee concluded.