In Case You Missed It

ICYMI: E&E reporter Hannah Northey did a great job covering FERC’s technical conference on the reliability impacts of EPA’s climate regulations, which was held yesterday in Washington, DC. 

Sen. Lisa Murkowski has repeatedly pressed FERC to take a bigger role in determining the effect of EPA’s rules and regulations on the electric grid. FERC has shown a limited willingness to engage, but EPA has pushed back – dramatically underestimating plant retirements and claiming coordination even when a sitting FERC commissioner acknowledges it hardly exists. 

EPA air chief Janet McCabe again avoided providing specifics at the FERC technical conference – convened, mind you, specifically to talk about the safety and reliability of the power grid. Instead she argued that squirrels present just as much of a threat to reliability as the EPA’s rules and regulations. It’s a nice try, but squirrels tend to chew through an individual power line here and there, not an entire baseload resource that provides 40 percent of our nation’s electricity. Given the critical importance of the power grid to our economy and security, we hope Ms. McCabe doesn’t plan to simply blame the squirrels if her agency’s rules contribute to a blackout.

Over at the Senate Energy and Natural Resources Committee we prefer “trust, but verify,” over “trust the EPA.” You might think we’re nuts, but instead of making bad puns about defenseless squirrels, we’re going to keep pushing FERC to legitimately engage with EPA on electric reliability. - Dillon

Squirrels jump into FERC-EPA talks on grid reliability (E&E)

Hannah Northey, E&E reporter | Wednesday, March 11, 2015

http://bit.ly/1HKEowj

Federal energy regulators struggled today to extract details from U.S. EPA about their role in the Clean Power Plan during a wide-ranging discussion that even touched on the threat that squirrels pose to the electric grid.

Federal Energy Regulatory Commission Chairwoman Cheryl LaFleur said at FERC's third technical conference on the EPA climate rule that she's trying to stay focused on finding reliability solutions that dovetail with EPA's efforts to curb greenhouse gas emissions.

"Right now we're concentrated on adding value to a process that you basically own," LaFleur told acting EPA air chief Janet McCabe.

But McCabe, who arrived late to the Washington, D.C., technical conference, offered few specifics about what EPA needs from FERC in the remaining months as it releases a final rule.

EPA, she said, is fully aware of concerns expressed in more than 3,000 comments about the impact of its rule on power prices and supplies. Reliability has been one of the agency's highest priorities, she said.

She also reiterated that during the past 40 years that EPA has imposed rules, the lights haven't gone off, and the rule's long time horizon will support the industry's planning of new infrastructure.

The discussion at one point wandered into other grid reliability threats.

McCabe said reliability is an ongoing issue for a variety of reasons -- not just because of EPA rules. A 2012 white paper from TE Connectivity Ltd. found that behind weather, animals were the second highest cause of U.S. power outages -- 7 percent overall.

"Including, as one of my staff informed me, squirrels," McCabe said. A squirrel in Ohio, for example, caused an outage that reportedly affected 4,500 customers in January.

LaFleur played along.

"Many think that distribution line people have a throwdown squirrel in their trunk" to blame outages on the critters, she said.

Jokes aside, FERC has for weeks received requests from state regulators, grid operators and utilities to push for easing the interim and final timelines in the EPA rule and to craft a mechanism for ensuring reliability of the electric grid.

While some groups have said the rule has plenty of flexibility to protect the system, others have warned timelines are tight, reserves are low, and there's no way to know what plants may be forced to close.

LaFleur said the commission could conduct studies and run models to identify reliability problems, relying on grid operators. Or the agency could look for "gaps" in state plans where outages could occur as pipelines or power plants may not come online in time.

The chairwoman said the commissioners plan to develop with staff a list of what roles the commission can play.

A concern, she said, is that FERC would serve as a "mediator" between EPA and states if outside groups intervene. She added that it might be helpful to articulate what arguments are "FERC-ish," or fall within the commission's jurisdiction.

"You get on thin jurisdictional ice pretty fast," LaFleur said.

Commissioner Philip Moeller said the rule is the "most comprehensive and profound" rule EPA has released, especially on the heels of the mercury and air toxins rule. FERC is trying to reach a consensus on proposals to offer EPA but reiterated LaFleur's request for more information about what EPA will need.

McCabe again veered toward broad comments. "While I don't have specifics to share with you ... I do welcome and anticipate that we will be able to have conversations as the rule moves closer to finalization on who to handle" reliability issues, she said.

Moeller expressed concern that the final rule will be released this summer and FERC needs advice on how to move forward. "We don't have a whole lot of time to make a recommendation because summer is coming," he said.

While hailing the Clean Power Plan as an "unequivocally good act for this country to clean up the environment," Commissioner Tony Clark asked McCabe for reassurances that EPA has considered local problems that can sometimes appear small but affect large swaths of the grid. Clark warned that solutions outside the market -- like ordering plants to run -- forces utilities to take on significant legal liability.

While the rule might not take down the entire grid, Clark said "very minor actions can have very specific impacts on local areas."

He also said he wouldn't gloss over the reason that the lights haven't gone out for decades, namely that utilities have taken on legal risks and customers the financial burden in times of trouble.

McCabe said Clark had made a "fair point" but that the Obama administration's goal of curbing emissions could be done without jeopardizing grid reliability.

"I take your point, we need to have a system than can be responsive to localized concerns that take into account many things as people plan for the future," she said.

“Ties That Bind” Puget Sound To Alaska Stronger Than Ever

By: Terri Hiroshima - Seattle Metropolitan Chamber of Commerce

New report finds business with Alaska accounts for 113,000 jobs in our region and generates $6.2 billion in wages

The Seattle Metro Chamber today released a new study that finds Alaska’s economic impact on the Puget Sound region continues to grow. Ties that Bind: The Enduring Economic Impact of Alaska on the Puget Sound Region, with research conducted by the McDowell Group, found that Alaska accounted for approximately 113,000 direct, indirect and induced jobs in the six-county region in 2013, and that these jobs generated $6.2 billion in wages.

The report includes findings from King, Pierce, Snohomish, Kitsap, Whatcom and Skagit Counties. The increase of Alaska’s impact is visible in a number of sectors, including:

• Freight/cargo: Interstate trade with Alaska accounted for over 80 percent of domestic containerized shipments through the Ports of Seattle and Tacoma, and 20 percent of total containerized shipments—roughly 10 percent of all marine cargo-related economic activity in Puget Sound
   
• Seafood: Just under 24,000 Puget Sound jobs and $1.3 billion in wages are tied to Alaska’s seafood industry.
   
• Passenger transportation and tourism: Nearly half the Alaska cruise market comes through Seattle, resulting in 434,600 people embarking and/or disembarking in the city.
   
• Maritime Support: Roughly 25 percent of all maritime industrial support services in our area are connected to Alaska-related business, which equates to 5,300 jobs and $390 million in wages.
• Refining: Alaska supplies nearly half of all crude oil refined in the Puget Sound region.
   
• Health Care: The Seattle metro area is home to several specialized medical centers that provide life-saving care for many Alaskans. The economic impact of Alaskan patients using Puget Sound medical facilities is 1,200 jobs and $87 million
   
• Education: Washington is the top state, outside of Alaska, for postsecondary enrollment among Alaska residents, who attend over 30 postsecondary institutions in the six-county Puget Sound area

“This report confirms that Seattle receives significant economic benefit from its ties to the state of Alaska,” said Joe Sprague, senior vice president of communications and external relations for Alaska Airlines. “This includes serving as a vital access point to Alaska, with over 1 million air passengers traveling between Alaska communities and Sea-Tac Airport annually. Alaska Airlines is proud to provide reliable, top-notch service that carried nearly two-thirds of all passengers flying out of Alaska last year.”

“Puget Sound and Alaska benefit from a dynamic and diverse economic relationship that serves residents here and in Alaska,” said Maud Daudon, president and CEO of the Seattle Metropolitan Chamber of Commerce. “Our shared connection is a win-win: Puget Sound businesses provide more than $5.3 billion in essential goods and services to Alaskans.”

“Ties that Bind” is the fourth commissioned report to measure the economic impacts of Alaska on the Puget Sound region. The first report was issued in 1985 with updates in 1994 and 2003. This 2015 report is commissioned by the Seattle Metropolitan Chamber of Commerce for the Alaska Business Forum, and is made possible through the generous support of its presenting sponsor, Alaska Airlines, as well as Lynden Transport, Port of Seattle, Port of Tacoma, Shell Oil Company, Totem Ocean Trailer Express (TOTE), and the At-Sea Processors Association. Other Ties That Bind supporters include the Tacoma-Pierce County Chamber of Commerce and the Alaska Chamber of Commerce.

“The transport of goods and supplies throughout Alaska is an important part of our economy. Nearly everything you can buy in Alaska is shipped through Puget Sound, and these businesses in both states rely upon us to deliver. It’s a great relationship we want to see strong and growing.” – Don Johnson, Tacoma Port Commission President

“Washington and Alaska have been closely linked business partners for more than two centuries. Though challenges are present, the potential for future growth is stronger than ever. This report provides insight and information allowing us to more properly prepare and align ourselves for future opportunities. We find the report invaluable as we look to the future, plan our strategies and make large capital investments. We have been serving Alaskans since 1954 and we look forward to doing so well into the future. As a freight carrier servicing the Alaska market, our business istrade between Washington and Alaska.” – Eric Wilson, Lynden Transport, Inc.

“The heritage between Washington and Alaska is rich and growing. When Alaska’s economy does well, so does Washington’s economy. Future opportunities are enormous but are challenged by poor policies. By working together, we can strengthen our economies for future generations.”– Rachael Petro, President and CEO, Alaska State Chamber of Commerce

The study measures economic impacts from the calendar year 2013 and incorporates findings from a voluntary survey of organizations that conduct business in Alaska, executive interviews, and secondary data from several state and federal agencies. The report can be found here.