On August 8, PJM joined MISO, ERCOT and SPP in submitting comments in response to a proposed EPA rule on New Source Performance Standards for Greenhouse Gas Emissions. The geographic reach of the Joint ISOs/RTOs encompasses an area of approximately 2 million square miles, in all or parts of 30 states and the District of Columbia, providing electric service to 154 million Americans.
In their Joint Comments, the Joint ISO/RTOs explained their concern with the potential reliability impacts of the proposed greenhouse gas rule. Specifically, the Joint ISO/RTOs stated:
“As the penetration of renewable resources continues to increase, the grid will need to rely even more on generation capable of providing critical reliability attributes. With continued and potentially accelerated retirements of dispatchable generation, supply of these reliability attributes will dwindle to concerning levels…. New technologies and industry practices are developing to enable the integration of significant inverter-based generation that provide needed essential reliability services, but the Joint ISO/RTOs are concerned about a scenario in which, similar to that stated above, needed technologies are not widely commercialized in time to balance out large amounts of retirements.”
The Joint ISO/RTOs also addressed the potential impact on investment:
“The Joint ISOs/RTOs are also concerned about the chilling impact of the Proposed Rule on investment required to retain and maintain existing units that are needed to provide key attributes and grid services before the compliance date required by the rule.”
The Joint ISO/RTOs also raised concern with EPA’s finding that co-firing with hydrogen or deployment of carbon capture and sequestration is sufficiently economic and technically viable to be deemed the Best System of Emissions Reduction, or BSER:
If the EPA is inclined to move forward with the Proposed Rule, the Joint ISOs/RTOs in their comments urge the EPA to at least include several additional features in the rule to help mitigate, although not eliminate, these reliability impacts. These features include:
- Specification of a new sub-category for existing units, providing a time-limited means for ISOs/RTOs to designate classes of units that are needed to maintain local or region-wide reliability until alternatives, which may be new transmission, new generation or storage resources, are available to address the specific identified reliability need;
- Building into the Rule a process to monitor and adjust the compliance schedule as applied to existing gas and coal units based on an examination as to whether the CCS and hydrogen co-firing infrastructure is developing at a sufficient pace to allow implementation in the time frame contemplated by the Proposed Rule. Such an ongoing review built into the Rule itself will ensure a better balance of the pace of retirements of dispatchable generation needed to provide critical grid services with the new additions providing such grid services;
- Providing specific recognition in the Rule of the availability of allowance trading on a regional, if not national, level to allow for greater flexibility and incentivize early and effective ‘over-compliance’ by those units that are capable of doing so;
- Updating the definition of ‘System Emergency’ to reduce uncertainty around when a unit may be called upon for reliability.
In conclusion, the group urges the EPA not to adopt the final rule before allowing “for a more thorough exploration of the reliability impacts of the proposed Rule and its impact on investment decisions, and to discuss these conclusions with the ISOs/RTOs.”
The filing notes that the EPA has engaged with the four grid operators productively on other rulemaking processes: “The Joint ISOs/RTOs look forward to continuing their constructive dialogue with the EPA as it proceeds to the next step in this process. We appreciate our past work with EPA and stand ready to work constructively to address the reliability issues surrounding the Proposed Rule as well.”