Washington, 20 August (Argus) — A US government watchdog agency said the potential impacts of upcoming environmental regulations on the electric grid will vary by region, with more coal-reliant states experiencing the biggest increase in electricity prices and plant retirements.
The Government Accountability Office (GAO) report found that four potential Environmental Protection Agency (EPA) regulations on the power industry—the finalized Cross-State Air Pollution rule, mercury and air toxics standards, the proposed cooling water intake structures and possible coal combustion residuals regulations—would have varied impacts in different regions.
The US northwest may only face a 0.1pc increase in electricity prices, but the south could see as much as a 13.5pc increase because of that region's greater dependence on coal-fired electricity, the report said. And while overall the country could see as little as 2pc of coal-fired capacity retired as a result of the regulations, some regions, like the midwest, may see almost 20pc of coal-fired plants retire.
“While these actions may not cause widespread reliability concerns, they may contribute to reliability challenges in some regions,” the GAO said.
These challenges could be magnified by the short timelines generators have to comply with the litany of rules, according to some stakeholders the agency interviewed.
“It may be difficult to schedule and complete all retrofits to install controls and to resolve all potential reliability concerns associated with retirements within compliance deadlines,” the GAO said.
The report concluded that the agencies it was reviewing, the Department of Energy, EPA and the Federal Energy Regulatory Commission (FERC), have available tools that could help address and mitigate some, but not all, potential reliability challenges and increases in consumer electricity prices.
The GAO recommended that the agencies take additional steps to monitor industry's progress in responding to the regulations. The three agencies should “develop and document a formal, joint process” to monitor this progress until at least 2017, GAO said.
While the EPA and Department of Energy agreed with the GAO's recommendations, FERC did not, saying the report did not account for some of the actions it had already taken.
Senator Jay Rockefeller (D-West Virginia) applauded the report, saying it upheld his view that the “benefits of these standards far outweigh the potential costs.”
“We must address the health and environmental concerns related to the power sector, and this report shows that we can do it responsibly,” Rockefeller said. “This report also makes clear that if federal agencies – such as the Department of Energy, EPA and FERC – coordinate their efforts, it could help ease the process of implementing the standards on states and communities.”
Send comments to firstname.lastname@example.org
If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.
Copyright © 2012 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.