Biden's energy policies could collapse power grid say power producers

Power producers are warning that the Biden administration’s new greenhouse gas rule could escalate the risk of power outages as fossil fuel-run plants are being forced into retirement.

Power producers across the country say the rule could compromise the power network’s reliability by pushing older coal and gas-powered plants into retirement faster than plants can potentially be replaced, according to Politico.

Todd Snitchler, president and CEO of the Electric Power Supply Association, told the outlet "we’ve already got reliability concerns."

Snitchler noted that many coal plants have retired after the Obama administration released it’s power plant climate rule in 2015 that was never enforced, adding that Biden’s rule also targets gas plants for pollution cuts.

"You don’t have anything today that can replace the gas that could retire," Snitchler said.

Electricity industry groups say that pollution-cutting technologies such as carbon capture and so-called green hydrogen are not yet commercially viable, meaning utilities in competitive power markets will have trouble justifying the building of new gas-fired power plants to replace the older coal ones that the rule is expected to push into early retirement.

The wait time to connect new resources to the grid is also long, meaning it’s unlikely that the majority of wind and solar built through last year’s climate law will be able to make up the capacity in the short term.

The Thursday proposed rule would have utilities decide between closing coal and gas plants producing high amounts of carbon dioxide by 2040, or retrofitting these plants with carbon capture technology and blending in hydrogen with the gas.

One power generation company executive, who spoke to Politico on conditions of anonymity, said they foresee investments in new gas plants stalling while lawsuits travel through the courts.

This person could create reliability concerns in coal-heavy regions, like the power market that stretches from North Dakota south to Louisiana.

That market is overseen by grid operator Midcontinent Independent System Operator, of which the executive said, "If I were MISO, I’d be really nervous."

The North American Electric Reliability Corp warned in its latest report that MISO risks capacity shortfalls as soon as this summer as the region may not be able to generate enough output to meet demand during a heat wave.

Former regulators though, say these fears have been inflated, and that keeping the lights on can go hand in hand with lowering power grid emissions.

“There’s always ‘the sky is falling’ proclamation. Industry always says, ‘We can’t do it, there’s no way,’ and it’s always done,” said Richard Glick, a former chairman of the Federal Energy Regulatory Commission. “It’s always done in a way that maintains reliability and also does it in a cost effective manner.”

“The lights are gonna go out if the weather gets worse,” he said. “And so that’s something that EPA and the Department of Energy and everyone else is well aware of.”

In 2020, power outages reached an all-time high, with the average person going seven hours without power in 2021 compared to less than four hours in 2013.

Former Trump-era FERC Chair Neil Chatterjee, now a senior advisor at law firm Hogan Lovells, said he doubts the power industry will close coal plants or freeze investments because he doubts the rule will withstand legal scrutiny.

“From a behavioral standpoint, I think industry is going to be much more reticent to make significant changes until they have clarity on the legal viability of the rule,” said Chatterjee.

“I don’t think it will have the deterrent effect on the build-out of gas plants that some in the administration hope,” he said of the rule.