I. Introduction
For the third time in twelve months, EPA signals its intention to crackdown on the backbone of the electric grid with a half-baked, legally dubious plan for generation shifting that amounts to little more than political posturing. The essentially political nature of EPA’s actions is confirmed not only by what it says but what it has omitted at every step over the past year: an analysis of the reliability impacts of its proposed restrictions on the carbon workhorses of America’s electricity grid. And EPA’s new request for public input suggests that, on policy and on the law, it is ignoring all warning signs and hurtling forward on a collision course with failure.
Instead of grappling with whether its contemplated regulatory approach satisfies the “energy requirements” of workaday Americans or newly rapacious data center consumers, EPA has put on a masterclass in avoidance at every stage. First, in the May 2023 proposal, it attempted to pawn off a “resource adequacy” analysis as confirming grid reliability until called out by a career official at another agency during the interagency process. Next, in its November 2023 supplemental solicitation of comment, the Agency cast around for potential “reliability mechanisms” to paper over the holes in grid reliability opened by its insistence on driving towards a fuel mix overly reliant on intermittent resources. And now, we come to the instant notice, posing “Framing Questions for Stakeholder Input” on how EPA should finalize its regulations on existing gas-fired power plants. Here, the Agency engages in the policy planning equivalent of throwing spaghetti at the wall, asking the public to validate one or another technically dubious scheme that EPA hopes will allow it to escape the corner into which it’s painted itself and ratepayers of all classes with the 2024 Final Rule.
The dilemma in which the Agency finds itself derives from two inconvenient facts. First, the President has staked his legacy on transforming the nation’s energy mix on an arbitrary timetable that bears no relationship to what is feasible (let alone desirable) on the ground and that has not been authorized by Congress. According to reporting, it was the White House that insisted that EPA’s 2023 proposal cover existing gas plants. The Agency only relented and left those plants unregulated in the 2024 Final Rule after States, grid reliability and planning organizations, and civil-society entities sounded the alarm that such a course, in addition to being unlawful, would plunge large swaths of the grid into darkness. Second, that Final Rule, which cracked down on existing coal plants and on new gas plants, only makes grid reliability all the more dependent on the existing natural gas fleet, as our modeling shows. But rather than acknowledge this reality and staying its regulatory hand, EPA shows the public through its “Framing Questions” that it has learned nothing. Until the courts stop it (again), or until a change in administration, EPA will not stop until it has transformed the utility sector and, in the telling words of its Administrator during the 2023 comment period, completed its suite of rulemakings that “help[] us to transition from heavily fossil fuel resources to clean resources.”40328072v.9 5
Faced with this intransigence, commenters have little choice but to do EPA’s job for it. Based on assumptions contained in the Regulatory Impact Analysis accompanying the 2024 Final Rule, CEA has modeled grid reliability in two different planning regions out to 2055. The results of this independent analysis are ugly. By 2035, widespread seasonal grid meltdowns are virtually engineered into the system. But the risks begin much sooner, as flagging ability to meet peak demand and non-existent reserve margins in both regions mean their grids are poised on the precipice before the end of this decade. This analysis confirms the imprudence of EPA’s regulatory actions to date and the supreme ill-advisedness of EPA moving forward with finalizing any restrictions on existing natural gas plants until, at the least, the grid impacts of its recently finalized regulations play out.
In light of the tone and content of EPA’s “Framing Questions,” commenters also must remind EPA, as CEA does here, that there are limits on its authority under Clean Air Act Section 111. The Supreme Court in 2022’s West Virginia v. EPA held that the Clean Power Plan exceeded those limits in its quest to shift the nation’s electric fuel mix. Because the 2024 Final Rule only pays lip service to that ruling, while patently still pursuing the same forbidden policy goal under the guise of traditional, source-specific regulation, stay motions are already pending in the D.C. Circuit to block that rule and shield the nation from its consequences. That EPA is now posing “Framing Questions” to prepare for another rule designed to shift the fuel mix, and that several of those questions verge on outright defiance of West Virginia, confirms that EPA is working towards goals it will not forthrightly acknowledge, operating on a timetable driven by politics rather than right reason and the rule of law. EPA must heed our and others’ warnings and abandon this regulatory adventurism, or this rulemaking will join the Clean Power Plan in the graveyard of ultra vires power grabs.
The EPA’s contemplated Power Plan 3.0 would plunge the grid into darkness according to CEA’s independent technical analysis
I. Introduction
For the third time in twelve months, EPA signals its intention to crackdown on the backbone of the electric grid with a half-baked, legally dubious plan for generation shifting that amounts to little more than political posturing. The essentially political nature of EPA’s actions is confirmed not only by what it says but what it has omitted at every step over the past year: an analysis of the reliability impacts of its proposed restrictions on the carbon workhorses of America’s electricity grid. And EPA’s new request for public input suggests that, on policy and on the law, it is ignoring all warning signs and hurtling forward on a collision course with failure.
Instead of grappling with whether its contemplated regulatory approach satisfies the “energy requirements” of workaday Americans or newly rapacious data center consumers, EPA has put on a masterclass in avoidance at every stage. First, in the May 2023 proposal, it attempted to pawn off a “resource adequacy” analysis as confirming grid reliability until called out by a career official at another agency during the interagency process. Next, in its November 2023 supplemental solicitation of comment, the Agency cast around for potential “reliability mechanisms” to paper over the holes in grid reliability opened by its insistence on driving towards a fuel mix overly reliant on intermittent resources. And now, we come to the instant notice, posing “Framing Questions for Stakeholder Input” on how EPA should finalize its regulations on existing gas-fired power plants. Here, the Agency engages in the policy planning equivalent of throwing spaghetti at the wall, asking the public to validate one or another technically dubious scheme that EPA hopes will allow it to escape the corner into which it’s painted itself and ratepayers of all classes with the 2024 Final Rule.
The dilemma in which the Agency finds itself derives from two inconvenient facts. First, the President has staked his legacy on transforming the nation’s energy mix on an arbitrary timetable that bears no relationship to what is feasible (let alone desirable) on the ground and that has not been authorized by Congress. According to reporting, it was the White House that insisted that EPA’s 2023 proposal cover existing gas plants. The Agency only relented and left those plants unregulated in the 2024 Final Rule after States, grid reliability and planning organizations, and civil-society entities sounded the alarm that such a course, in addition to being unlawful, would plunge large swaths of the grid into darkness. Second, that Final Rule, which cracked down on existing coal plants and on new gas plants, only makes grid reliability all the more dependent on the existing natural gas fleet, as our modeling shows. But rather than acknowledge this reality and staying its regulatory hand, EPA shows the public through its “Framing Questions” that it has learned nothing. Until the courts stop it (again), or until a change in administration, EPA will not stop until it has transformed the utility sector and, in the telling words of its Administrator during the 2023 comment period, completed its suite of rulemakings that “help[] us to transition from heavily fossil fuel resources to clean resources.”40328072v.9 5
Faced with this intransigence, commenters have little choice but to do EPA’s job for it. Based on assumptions contained in the Regulatory Impact Analysis accompanying the 2024 Final Rule, CEA has modeled grid reliability in two different planning regions out to 2055. The results of this independent analysis are ugly. By 2035, widespread seasonal grid meltdowns are virtually engineered into the system. But the risks begin much sooner, as flagging ability to meet peak demand and non-existent reserve margins in both regions mean their grids are poised on the precipice before the end of this decade. This analysis confirms the imprudence of EPA’s regulatory actions to date and the supreme ill-advisedness of EPA moving forward with finalizing any restrictions on existing natural gas plants until, at the least, the grid impacts of its recently finalized regulations play out.
In light of the tone and content of EPA’s “Framing Questions,” commenters also must remind EPA, as CEA does here, that there are limits on its authority under Clean Air Act Section 111. The Supreme Court in 2022’s West Virginia v. EPA held that the Clean Power Plan exceeded those limits in its quest to shift the nation’s electric fuel mix. Because the 2024 Final Rule only pays lip service to that ruling, while patently still pursuing the same forbidden policy goal under the guise of traditional, source-specific regulation, stay motions are already pending in the D.C. Circuit to block that rule and shield the nation from its consequences. That EPA is now posing “Framing Questions” to prepare for another rule designed to shift the fuel mix, and that several of those questions verge on outright defiance of West Virginia, confirms that EPA is working towards goals it will not forthrightly acknowledge, operating on a timetable driven by politics rather than right reason and the rule of law. EPA must heed our and others’ warnings and abandon this regulatory adventurism, or this rulemaking will join the Clean Power Plan in the graveyard of ultra vires power grabs.