The PJ Tatler

ERCOT: EPA Rule Threatens to Turn Out the Lights in Texas

Texas’ Electric Reliability Coalition of Texas — ERCOT — is firing up the warning flare that if the EPA’s new cross-state rules go into effect on January 1, 2012, parts of Texas may well go dark.

This is one of those cases where we believe it is our role to voice our concern that Texas could face a shortage of generation necessary to keep the lights on in Texas within a few years, if the EPA’s Cross-State Rule is implemented as written.

ERCOT’s May11 report to the Public Utility Commission on the impact of the proposed environmental regulations did not address the impact of SO2 restrictions on coal plants in ERCOT because these restrictions on Texas were not included as part of the EPA’s earlier rule proposal.  We have not had time to fully analyze the entire 1,323-page Cross-State Rule released July 7 or to communicate with the generation owners regarding what their intentions will be.  However, initial implications are that the SO2 requirements for Texas added at the last stage of the rule development will have a significant impact on coal generation, which provided 40 percent of the electricity consumed in ERCOT in 2010.

Our concern is that the timing of the new requirements – effective Jan. 1, 2012 – is unreasonable because it does not allow enough time to implement operational responses to ensure reliability.  We fear that many of the coal plants in ERCOT will be forced to limit or shut down operations in order to maintain compliance with the new rule, possibly leading to inadequate operating reserve margins with insufficient time to reliably retrofit existing generation or build new, replacement generation.

The EPA set out this rule change in a way that guaranteed push back, and that is completely counter to the transparency that Obama promised. I know, that was a cynical lie, but nevertheless he promised it. The EPA has no idea just how much trouble this rule change may potentially cause. I strongly suggest that they re-think this and stand down. Never mind leaving businesses and families uncertain on their electricity in the winter at the turn of the year — an election year, no less. That’s just the beginning of the trouble the Obama gang is courting here.

Texas is not going to go dark, not for the EPA or anyone else. We just won’t. Having the EPA tell Texas to turn out the lights is among the quickest ways of creating a “Come and take it” moment I can think of. I’ll tell you what this will do, if the EPA insists on pushing this. It will create a storm of rage in a state that’s not known to be exactly friendly to the folks in Washington. It will give a certain presidential candidate a whole lot of motivation to swing away at Obama, pointing directly to the heavy-handed government that Obama and his appointees are unleashing on the states. His own state, as a matter of fact, the state that has led the way in job creation while Obama’s policies have disrupted the economy nationwide. If he wins, the EPA may well be the first agency he targets for extinction.

Like I said, the EPA would be wise to back off and stop messing with Texas.

Update: Bug or feature? Feature, obviously. Obama told us he would cause energy prices to skyrocket, and now he’s making good on the threat.


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