U.S. DOE study finds proposed EPA air quality standards, compliance timeline won't create resource adequacy issues for electricity system; results modeled on 2015 stress test scenario more stringent than new EPA rules

Tracy McDonald

WASHINGTON , December 1, 2011 (press release) – In anticipation of forthcoming Environmental Protection Agency proposals for clean air standards, the Department of Energy today released a new report examining the potential impact those proposed standards could have on the reliability of our nation’s energy systems. The report compares compliance deadlines even more stringent than those that are expected to be associated with the Cross-State Air Pollution Rule (CSAPR) and the Mercury and Air Toxics Standards (MATS) to typical timelines for the installation of pollution controls at existing older plants and construction of new generation capacity. Echoing the results of several other recent reports, the Department’s review indicated that the new EPA rules will not create resource adequacy issues.

To the extent that any localized reliability issues arise as the power sector adjusts to these rules, flexibility mechanisms in the Clean Air Act exist to ensure that any issues could be fully addressed before electricity delivery would be affected.

“Our review, combined with several other studies, demonstrate that new EPA rules – which will provide extensive public health protections from an array of harmful pollutants – should not create resource adequacy issues," said David Sandalow, Assistant Secretary for Policy and International Affairs. "Any local reliability challenges that could arise should be manageable with timely cooperation and effective coordination among all relevant stakeholders. Working together, we can and will provide safe, reliable electricity to American consumers.”

The Department developed and modeled a conservative “stress test” scenario for 2015 that was deliberately constructed to be more stringent than the new EPA rules. Assuming prompt action by regulators and generators, the timelines associated with the construction of new generation capacity and installation of pollution control retrofits would generally be comparable to EPA’s regulatory compliance timelines.

Even in the stringent test case, the overall resources would be adequate, with only the potential need for a small amount of additional new generation capacity – some of which is already under development – to maintain regional planning targets.

With the information currently available, it is clear the overall supply-demand balance for electric power in each region examined would be adequate.

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