Today, the Biden administration’s Environmental Protection Agency’s (EPA) unleashed a suite of rules specifically designed to force the closure of well-operating coal plants and they did so with absolutely no analysis of the collective impact of these rules on the nation’s alarmingly shaky grid reliability.

“For the last three years, the administration has methodically developed and executed a comprehensive strategy to force the closure of well-operating coal plants,” said Rich Nolan, NMA president and CEO.  “It has refused to account for irrefutable evidence that electricity demand is soaring, disregarded validated reliability warnings from grid experts related to coal plant closures, and ignored the basic fact that there is no adequate replacement ready to replace the sorely needed, dispatchable generating capacity coal provides once it is shuttered. We’ve seen this unlawful regulatory playbook before, challenged it and the Supreme Court agreed with our take; we will do so again and expect the same outcome.”

As outlined in the NMA’s recent white paper, “The Grid Reliability Crisis Collides with Surging Power Demand,” much of the U.S. grid is at risk with surging new electricity demand colliding with policy-driven power plant closures and mounting challenges to bring new resources and enabling infrastructure to the grid. While much of the coverage today has reprinted EPA talking points, stunningly little attention has been given to the existing grid reliability crisis and how remarkably out of step EPA’s regulatory blitz is with what the nation’s reliability experts and grid operators have warned we should be doing to responsibly manage the energy transition.

The Reliability Crisis is Already Here

In December, the North American Electric Reliability Corp. (NERC) warned in its Long-Term Reliability Assessment that the collision of soaring power demand with the planned retirement of 83 GW of fossil and nuclear generation – a loss of generating capacity powering more than 62 million homes – creates blackout risks for most of the country. The grid monitor also noted that another 30 GW of capacity is expected to close but the plans aren’t yet final. Notably, these projections did not include the impact from any of the rules promulgated today.

In the same report, NERC cautioned that, “environmental regulations and energy policies that are overly rigid and lack provisions for electric grid reliability have the potential to influence generators to seek deactivation despite a projected resource adequacy or operating reliability risk.”

Jim Robb, president and CEO of NERC, testified to Congress that, “we must manage the pace of the transformation in an orderly way, which is currently not happening.”

Federal Energy Regulatory Commission (FERC) Chairman Willie Phillips, appointed by President Biden, told Congress, “I am extremely concerned about the pace of retirements we are seeing of generators which are needed for reliability on our system. NERC and the grid operators have warned us about this.”

FERC Commissioner Mark Christie observed power plants are being retired at a faster pace than they’re being replaced. “The arithmetic doesn’t work,” he said. “This problem is coming. It’s coming quickly. The red lights are flashing.”

Manu Asthana, President & CEO of PJM Interconnection, testified to Congress that, “we will need to slow down the retirement or restriction of existing generation until replacement capacity is deployed… frankly, we see this as the single largest risk in the energy transition.”

EPA not only did not listen but has now doubled down, dramatically accelerating retirements.

It’s the Suite of Rules

For all of the focus on EPA’s new, unlawful carbon capture mandate, the so-called Clean Power Plan 2.0 bats clean-up for a suite of rules targeting the fleet. The cumulative impact of these rules will force power plant retirements even faster than the timelines outlined in the CPP 2.0. While EPA claims it has provided flexibility and glide paths in the CPP 2.0, the larger suite of rules tells a very different story.

In fact, in 2022, EPA administrator Michael Regan boasted that he didn’t even need a new carbon rule to achieve emissions reductions. He’d use a suite of other rules to force plant closures and has now made good on that boast. He said, “The industry gets to take a look at this suite of rules all at once and say, ‘Is it worth doubling down on investments in this current facility or operation, or should we look at the cost and say no… If some of these facilities decide that it’s not worth investing in [control technologies] and you get an expedited retirement, that’s the best tool for reducing greenhouse gas emissions.”

The Mercury Air Toxics Standards (MATS), Steam Electric Power Generating Effluent Guidelines and Standards (ELGS), Ozone Transport rule, Coal Combustion Residuals (CCR) legacy surface impoundment rule, particulate matter National Ambient Air Quality Standards (NAAQS) and expected Regional Haze state implementation plan disapprovals are all crashing down on the fleet forcing essential plants offline almost immediately.

In the PJM electricity market, the nation’s largest serving 65 million Americans, the grid operator warned last year that just three of these rules – not including the CPP 2.0 – could force 10,500 MW of capacity off the grid. PJM projected it will be short of power by 2030 and facing a reliability crisis during periods of peak demand even sooner. The enormous challenges facing PJM are playing out in states and electricity markets across the country and with today’s announcement have grown far more acute.

CCS is not Adequately Demonstrated

As important as CCS is – and will be – to global climate action, mandating its use at the nation’s coal plants, and new natural gas plants, by 2032 and claiming, as Section 111 of the Clean Air Act requires, that it’s “adequately demonstrated” is laughable and unlawful.  

There is not a single coal plant in the world capturing carbon at the level EPA now requires.

Based on EPA’s proposed timeline, plant owners would need to install carbon capture at power plants, build required infrastructure – such as pipelines and injection wells – and permit them all in just seven years. Not only does the infrastructure to transport CO2 not exist, storage options are few and far between. EPA itself admits 19 states have no potential for storage at all.

Even if a suitable storage location is accessible, the challenges hardly end there. Consider the mess of obtaining a Class VI underground injection control permit, as required under the Safe Drinking Water Act. As of the fall of last year, EPA has issued just two Class VI permits that made it to the injection phase. Both took six years to process.

The House Committee on Oversight and Accountability found that officials within the administration made clear that the technology mandates in the rule simply don’t pass muster.

In one example, a member of the administration wrote, “(CCUS) has not yet met the legal threshold for being considered a Best System of Emissions Reduction since it has not been adequately demonstrated. …CCUS remains prohibitively expensive even after use of funds or tax credits made available through the Inflation Reduction Act.”