GAO: EPA rules pose acceptable "reliability challenges" for utility industry

A Government Accountability Office (GAO) report released Thursday said the implementation of four environmental rules will likely pose electric “reliability challenges,” though not the full-blown problems Republicans and the utility industry have claimed.

The nonpartisan GAO said the Environmental Protection Agency (EPA) rules studied “are not expected to pose widespread concerns” regarding electric reliability. It estimated between 2 to 12 percent of coal-fueled capacity might shut down as a result of the rules. But the report added “EPA and some stakeholders GAO interviewed indicated that these actions should not affect reliability given existing tools.”

Sen. Jay Rockefeller (D-W. Va.) said the report was a win for the rules’ proponents. “We must address the health and environmental concerns related to the power sector, and this report shows that we can do it responsibly,” he said in a statement Thursday. 

Still, the report was not a clean victory for the EPA’s defenders.

The report said power plant operators possess the ability to overcome “reliability challenges,” though doing so in coal-dependent states will be more difficult. The GAO report acknowledged federal coordination needs to improve to evaluate industry progress under the regulations, especially to help power plant operators meet the rules’ compliance targets.

“Some other stakeholders GAO interviewed identified potential reliability challenges,” the report said. “Among other things, 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 rules GAO studied were: The Cross-State Air Pollution Rule; the Mercury and Air Toxics Standards; the proposed Cooling Water Intake Structures regulation; and the proposed Disposal of Coal Combustion Residuals regulation.

Republicans have denounced the EPA proposals. They say procuring the technology needed to comply with the rules will take longer than EPA is willing to give.

GOP lawmakers, and the electric power industry, contend the rules will shutter too many coal-fired plants, potentially leading to more electricity blackouts. They also say it will increase electricity bills for residents in coal-heavy states.

The GAO report partially refuted the cost claim. It said the rules would increase rates unevenly – the coal-reliant South being hardest hit – but that over time costs could decrease compared with historical fluctuations.

The rise of natural gas will also eliminate some of the cost and reliability concerns, the GAO report said. Cheap natural gas is already replacing coal as a source of electric power, and that alone could push power operators to shut down coal plants, the report said.

Republican staff for the House Energy and Commerce Committee, which has held several hearings on the rules and their effects on electric reliability, told The Hill it was still reviewing the report.

The GAO report builds on an August 2011 report by the nonpartisan Congressional Research Service (CRS) that said utility industry claims about the rules were excessive. That report found the regulations would not result in a significant number of power plant retirements.

The CRS report also said public health benefits from instituting the rules far outweighed the costs.

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