Heartland, South Dakota PUC urge federal evaluation of EPA regulations

The South Dakota Public Utilities Commission filed comments with the Federal Energy Regulatory Commission this week asking FERC to study how regulations of the Environmental Protection Agency will impact the reliability and affordability of electricity. The PUC urges FERC to establish one or more joint boards comprised of federal and state representatives, including a board for South Dakota and the Upper Midwest region.

The South Dakota PUC joins the South Carolina PUC and Alaska Senator Lisa Murkowski in demanding FERC use its resources and expertise to study the potential negative impact on the nation’s electric grid that could occur as a result of recent EPA regulations.

“Studying the effects of EPA’s regulations is a shared responsibility of FERC and state public utility commissions. States cannot conduct this analysis alone because the impacts of EPA’s regulations are experienced regionally and nationally,” states the letter to FERC sent by PUC commissioners Gary Hanson, Chris Nelson and Kristie Fiegen.

The PUC further pointed out that numerous proposed EPA regulations that will become effective over a very compressed time frame have the potential to cause the premature retirement of a number of generating facilities in the Midwest, creating serious reliability and economic consequences. Approximately 70 percent of the electricity used by South Dakotans is generated by coal-fired power plants.

Hanson, the commission’s chairman, expressed disappointment with FERC’s inaction related to the EPA’s process. “FERC’s refusal to address the reliability issues of the new EPA regulations is going to cause havoc,” he said. “I am very concerned about our environment but that does not mean we can simply arbitrarily close down electric generation facilities without having a comprehensive plan on how electricity will be provided to our citizens,” Hanson said.

PUC Vice Chairman Nelson emphasized the need for the two federal agencies to work together and with affected stakeholders. “It is imperative that state regulators and members of the electric industry be part of this analysis,” he said. “It’s very troubling that FERC and the EPA have not recognized the value these frontline voices can bring to the process and even more troubling those folks in Washington are dismissing the huge detrimental impact these regulations can have on citizens,” he concluded.

“Clearly, this is an important issue that can significantly impact many states,” stated PUC Commissioner Fiegen. “Electric service interruptions are serious and, as we’ve seen in South Dakota, can have far-reaching repercussions especially in the winter months. We need assurance from the federal regulators that their actions strive to protect the integrity of and not harm electric reliability,” she said.

In its closing written comments to FERC, the PUC stated: “There is no excuse if the lights go out because of poor government decision-making that could have been avoided if the responsible areas of government had properly coordinated with each other.”

The PUC’s letter to FERC comes on the heels of a letter of similar expression submitted to President Obama from Heartland and representatives from sixteen other non-profit, consumer-owned public utilities.  The utilities’ letter urges for transparency in the EPA regulation process in the form of independent analysis of the impacts of the EPA agenda on energy consumers before it is implemented.  The letter states that the pace and stringency of expanded EPA regulation will impact electric reliability, resource adequacy and impose significant costs on electric consumers.

Because these utilities are consumer-owned, costs imposed by the EPA must be passed directly on to consumers. Small communities with disproportionate shares of low income consumers and elderly citizens on fixed incomes will be most affected by the regulation.  Similar to the PUC, the utilities point out that the EPA’s expectation of the power sector to comply with new requirements in as few as three years is unrealistic. Given the timeline for designing changes, procuring equipment, scheduling outages and construction to comply with requirements, the utilities also predict many operating plants being forced to shut down, further preventing the delivery of electricity to consumers.

“We are very concerned about the aggressive EPA regulatory agenda,” said Heartland General Manager Mike McDowell. “As a consumer-owned, non-profit utility, cost and reliability to end-users is our number one priority.”

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