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Washington Week: Comment period closing on US EPA's power plant carbon rule

The U.S. Environmental Protection Agency will soon mull feedback on its proposed Affordable Clean Energy rule, with final comments on the proposal due Oct. 31.

The rule, known as ACE, which the EPA released on Aug. 21, would require states to form plans for improving the efficiency of existing coal-fired power plants. The agency is also taking comments on possible criteria for improving the heat rates of existing natural gas-fired plants, although the EPA did not include requirements for gas units in its proposed rule.

The ACE rule is intended to replace the Obama administration's Clean Power Plan, which the U.S. Supreme Court put on hold in February 2016. Unlike the proposed ACE rule, the Clean Power Plan would have applied to all existing fossil fuel-fired plants and included state-specific emissions rate limits for carbon dioxide.

Coal industry members have praised the Trump administration's proposed replacement rule, but environmental groups have promised to fight the ACE regulation, saying it would not do enough to protect people from the impacts of climate change. In its fall regulatory agenda, the EPA said it expects to issue a final ACE rule in March 2019.

SAFE comment period closed

The comment period closed recently on the Trump administration's proposed freeze in corporate average fuel economy and greenhouse gas standards for cars and light-duty trucks. The administration's preferred option under the Safer Affordable Fuel-Efficient Vehicles, or SAFE Vehicles, rule would freeze vehicle standards at 2020 levels for model years 2021-2026 rather than ratchet them up as called for under the existing Obama-era standards.

On Oct. 26, a group of largely Democratic U.S. Senators wrote to EPA Acting Administrator Andrew Wheeler and Transportation Secretary Elaine Chao to oppose the proposal. The senators said the SAFE Vehicles rule would harm consumers, increase oil consumption and worsen climate change. They also called the proposal an "attack" on California's waiver under the Clean Air Act to form its own, tougher automobile standards.

California officials also assailed the Trump administration's proposal, noting the auto industry has experienced strong sales and a decline in emissions since the Obama-era standards debuted in 2012. California Attorney General Xavier Becerra submitted a letter to the EPA from 21 state attorneys general arguing that the proposal violates the EPA's and National Highway Traffic Safety Administration's legislative mandates to protect the public from air pollution and to conserve energy.

But in an Oct. 26 statement, Wheeler said California has yet to give the EPA a counteroffer on forming a 50-state solution on vehicle emissions standards, despite promising to submit one within a week of the administration publishing the proposed rule in August.

In a summary of its comments on the SAFE Vehicles rule, the Alliance of Automobile Manufacturers said it actively supported a single national program that covers all 50 states and appreciated the administration's reconsideration of the Obama-era standards. The alliance said the existing requirements were based on many incorrect projections and assumptions regarding the market share of cars and trucks, future gasoline prices and the adoption rate of alternative powertrain vehicles.

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The EPA is hoping to finalize its Affordable Clean Energy rule and updated vehicle fuel economy and emissions standards for cars and light-duty trucks by March 2019.

Source: Associated Press

PJM to roll out fuel security findings

On Nov. 1, the PJM Interconnection will release the results of a highly-anticipated fuel security study the grid operator launched in late April. The results will also be discussed at a Nov. 1 special session of PJM's markets and reliability committee.

The study was aimed at evaluating potential fuel security risks in the region and whether the PJM market appropriately values the security of the various energy resources it depends upon. PJM hopes to incorporate any potential market changes resulting from the study into its next capacity auction for the 2022-2023 delivery year.

PJM's fuel security analysis is part of a broader effort to gauge the region's grid resilience and determine whether policy changes are needed to keep the grid secure. In addition to the fuel security review, PJM recently proposed tariff changes to account for the price-suppressive effects of state-subsidized energy resources on its capacity market.

PJM made the proposal after the Federal Energy Regulatory Commission found the grid operator's market tariff was unjust and unreasonable for not effectively handling the impacts of subsidized resources on PJM's capacity market. At the same time, FERC rejected two prior proposals from PJM aimed at dealing with the issue of subsidized resources.

Trump signs water infrastructure bill

On Oct. 23, President Donald Trump signed a water infrastructure bill into law that included licensing reforms for hydropower facilities. The America's Water Infrastructure Act of 2018, which had sweeping bipartisan support in the U.S. Congress, will authorize federal funds for water infrastructure and safe drinking water projects.

The new law also includes reforms to the federal licensing process for hydropower facilities, with the goal of shortening permitting times for new projects. In addition, the legislation will allow consumers and other parties to challenge power rate changes before FERC even if the new rates took effect without an order from the commission.

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Federal agencies

Oct. 31

Final comments are due on the U.S. Environmental Protection Agency's proposed Affordable Clean Energy rule for existing electric generating units.

Industry events

Oct. 29-30

The Energy Bar Association's 2018 Mid-Year Energy Forum will take place in Washington, D.C.

Nov. 1

PJM Interconnection President and CEO Andrew Ott and Michael Bryson, vice president of operations, will release the results of PJM's recent fuel security analysis. The release will take place at the National Press Club in Washington, D.C.

Nov. 1

EnerKnol and New York University's Institute for Policy Integrity hold a webinar on energy storage regulation.

Other notable stories from last week

White House taps Chatterjee to chair FERC in light of McIntyre health issues

New FERC chairman could mean the end of pipeline policy review, analysts say

DOE heard mostly criticism of FirstEnergy Solutions' coal, nuclear relief plan

Exelon CEO waiting for US government to give design-basis threat for resiliency

Democrats Heitkamp, O'Rourke get oil, gas cash despite industry's heavy GOP lean

Politics in Colorado could drive oil and gas industry to 'friendlier basins'