Dive Brief:

• A study released Tuesday by the North American Electric Reliability Corp. (NERC) concludes that more time is needed for utilities to develop new generation and transmission than is allowed by the timeline for carbon pollution reductions in the EPA's proposed Clean Power Plan (CPP).
• The draft carbon regulations aim to cut carbon emissions 30% below 2005 levels by 2030, and require steep carbon cuts from many states by 2020. According to NERC, utilities take 4-5 years to build new generation plants and 6-15 years to construct new transmission lines to support them, meaning that both the interim 2020 compliance date and the final 2030 date should be revised. NERC did not give a recommendation on an alternative timeline.
• NERC warns of reliability issues if the dates are not altered. The EPA has said reliability is a top priority and that the NERC report is premature in concluding the CPP threatens reliability because the regulations will not be finalized until this summer. EPA officials have hinted that the timeline will likely be revised.

Dive Insight:

While they believe changes in the Clean Power Plan's timeline will be crucial to ensure smooth compliance without reliability issues, NERC officials on a media call Tuesday cautioned that it would be premature to conclude from this report that the regulations could cause blackouts throughout the nation.

If utilities are allowed time to build out new gas and renewables capacity, plus the transmission to support it, states will be able to make the emissions cuts the Obama administration wants while ensuring reliability. It just may not be able to happen by 2030, and the 2020 interim date presents some severe problems, the NERC analysts said. Power companies and grid operators throughout the nation have also called into question the 2020 date. 

The NERC report recommends: 

1. Ongoing independent evaluation of the CPP’s reliability implications,
2. Holding ongoing regional and multi-regional planning and analysis groups to evaluate reliability concerns, as FERC has done throughout the nation this year,
3. New, longer-term transitional plans from stakeholders to address potential reliability risks and infrastructure deployment requirements,  
4. An EPA-created reliability assurance mechanism in the final rule,
5. Incorporation of demonstrated reliability in all state and regional planning through established planning analyses and processes.  

The EPA and some alternative energy groups called the report premature, pointing to the fact that the rule won't be finalized until the middle of the summer and questioning NERC's methodology. 

The NERC report “overstates the reliability issues,” said Malcolm Woolf, Policy VP for renewables business advocacy group Advanced Energy Economy. NERC’s model “overlooks many of the operational tools that grid operators have developed, and are continuing to develop, to manage a grid.” 

The analysis also “excludes some technologies like demand response and puts artificial constraints on the contributions other technologies, including renewable energy and energy efficiency, skewing the results.” Finally, it fails to recognize “states have the flexibility to spread their emission reductions over the 10-year compliance period,” he said.