The US Environmental Protection Agency’s proposed rule to reduce carbon dioxide emissions from existing power plants has aggressive schedule and includes assumptions that may jeopardize the reliability of the US power grid, the North North American Electric Reliability Corp. said Wednesday.

EPA’s proposed rule, which would to cut CO2 emissions to 30% below 2005 levels by 2030 — with an interim reduction target starting in 2020 — calls for states to develop their own implementation plans. Once the rule becomes final, which is scheduled for June 2015, states would develop compliance plans and EPA would act on them, something that could occur by 2018 or later, leaving little time before 2020 for the power industry to address reliability challenges associated with the changes, NERC said.

EPA estimated that US generation capacity would be reduced by 108 GW and 134 GW, depending on state implementation plans and the number of coal-fired units that are shut, NERC said.

“The number of estimated retirements identified in the EPA’s proposed rule may be conservative if the assumptions prove to be unachievable. Developing suitable replacement generation resources to maintain adequate reserve margin levels may represent a significant reliability challenge, given the constrained time period for implementation,” the reliability group said.

The use of gas-fired generation is expected to rise under EPA’s proposal, but pipeline expansions will take time to meet some of those needs and “growing gas and electric interdependency challenges impede the electric industry’s ability to obtain needed natural gas services,” NERC said in a report.

Further, one of the options available to states is to boost energy efficiency and reduce power usage, but EPA assumes states and the utility sector will expand efficiency savings programs from 22 TWh/year in 2012 to 108 TWh/year in 2020, reaching 380 TWh/year by 2029. Under such aggressive forecasts, EPA projects that efficiency gains will rise faster than electricity demand and that total electricity demand will shrink after 2020. If those efficiency gains cannot be met, additional CO2 reduction measures would be needed, likely through reduced fossil fuel generation, NERC said.

The changes in the generation resource mix and changes in power flows on the transmission grid resulting from the EPA proposal may present reliability challenges that should be examined further by independent system operators, utilities and others in the power sector, NERC said.

“Based on our preliminary assessment of the proposed rule, we believe there must be further detailed engineering analysis to demonstrate whether the assumptions and targets are feasible in the time-frame proposed,” NERC CEO Gerry Cauley said in a statement.

If the environmental goals of the proposed rule are to be achieved, EPA and policymakers “should consider a more timely approach” that addresses bulk power system reliability concerns and infrastructure deployments, the report said.

In a late Wednesday statement, EPA said that in its “40-year history, there have been no instances in which the Clean Air Act standards have caused the lights to go out and the Clean Power Plan reflects the EPA’s continued commitment to ensuring reliability as standards and programs move forward.”

“During the development of power sector rules, EPA devoted significant attention to ensuring that the Clean Power Plan’s public health and environmental protections are achieved without interfering with a reliable supply of electricity. EPA’s analysis of the Clean Power Plan finds that the proposal would not raise significant concerns over regional resource adequacy or raise the potential for interregional grid problems. Any remaining local issues would be managed, as they are today, through standard reliability planning processes.”

The agency also said that as it worked to develop the proposed Clean Power Plan, it worked with the Federal Energy Regulatory Commission, the Department of Energy, regional reliability organizations, RTOs and ISOs, state public utility commissions and others “to ensure that environmental requirements remain compatible with maintaining electric reliability. We plan to continue working with these entities after the rules are in place to ensure that implementation goes smoothly and without interfering with electric reliability.”

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