111(d)ominates NARUC in Dallas

By John Howell, Esq., Vice President

111(d)ominatesHow things have changed in six months. The National Association of Regulatory Commissioners (NARUC) Summer Committee Meetings were held last week in Dallas with the Environmental Protection Agency’s 111(d) proposed guidelines to reduce greenhouse gas emissions from existing fossil-fueled power plants dominating the meetings. By comparison, no single issue dominated the Winter Committee Meetings last February. Hydraulic Fracturing (“Fracking”), Integration of the Electric Grid, Demand Response, Cybersecurity, and Net Neutrality – among several other topics – each played a prominent role in shaping the Winter Meetings’ discussions. In Dallas, it was an entirely different atmosphere. From the start of the meetings with the Staff Subcommittee on Electricity taking up a discussion on “Compliance Strategies for 111 (d) and Impacts on System Reliability” to the final General Session dedicated to “111(d) in Big D: Compliance Options, Regional Approaches, and Where We Go From Here”, it was impossible to step into a room, a hallway, or even the sports bar and not discuss 111(d).

There were several other important issues being addressed at the NARUC Summer Meetings, including an issue that desperately needs resolution after many (too many) years of discussion. Why are we still dealing with large scale E911 (wireless) systems issues and when will Public Safety finally get the next generation E911 system they deserve? The Telecommunications Committee held a meeting to discuss “The Vulnerabilities and Opportunities of Next-Generation 911 Networks” and focused on Washington State where, this past spring, there was a large-scale outage resulting in thousands of emergency calls left unanswered. Due to the nature and location of this outage, several other states felt the impact as well. This outage joins what is nothing short of a debacle in New York City concerning the myriad problems with the City’s “upgraded” 911 system, and several prominent stories concerning the misrouting of calls including those in my backyard of Washington, D.C. As a former attorney at a major wireless company, focused on the nation’s E911 system, I can tell you these issues should not be rearing their head. It is far past the time where public safety should have a reliable E911 system and far past the time for discussions around these problems….although I praise NARUC for continuing to beat the drum for public safety.

The electric grid, distributed generation, and demand response were topics that shared some of the spotlight at NARUC. Meeting topics included: “The Integrated Grid: A Deep Dive”, “Sharknado: Are Claims About the Impending Demise of a Centralized Grid Greatly Exaggerated” and “The D.C. Circuit Kills Demand Response Compensation, Now What?”. The most informative and lively meeting I attended on this subject was not actually a NARUC meeting, however. The Institute for Electric Innovation hosted a briefing on “The Power Grid’s Evolution into an Energy Services Platform.” The panel, consisting of senior utility, solar, and industry representatives along with a Commission chairman, held a non-scripted discussion that was both refreshingly honest and informative. Two common themes permeated the discussion. First, the centralized electric grid is here to stay – at least for the foreseeable future – but it must evolve and adapt to the increased availability of alternative sources of energy including solar and wind. Second, consumers must be better educated about the value of the electric grid. As one presenter put it, “it’s not as simple as putting solar panels on your roof and believing that’s all you will need and are no longer dependent on the grid.”

One of the most surprising things I heard at NARUC came out of a fairly innocuous meeting discussing hydraulic fracturing. Several commissioners in attendance prefaced their comments and/or questions with the statement that they are pro-fracking and either wish their respective states had shale gas plays or, if they did have shale gas plays, that they encourage greater fracking operations. Fracking is an issue we are following closely and it is one of the truly divisive topics in the regulatory arena. As such, I expected the commissioners to be reticent to speak strongly one way or the other on the subject due to its incendiary nature; instead, I heard resounding support for the industry.

But 111(d) “(d)ominated.” Meetings were standing room only and regulators were engaged more so than on any other topic. During the final General Session that concluded the meetings, the Honorable Jon McKinney, Commissioner, West Virginia, set forth the concerns that many, if not all, of the states share in a Top 10 List cut right out of the pages of a Late Night with David Letterman script. Two entries on the Commissioner’s list particularly struck me and, I think, really frame the debate that has started and will continue for months to come. In making a point about the danger of making assumptions, Commissioner McKinney opined in his #3 on the list that the EPA “is assuming the legality of regulating under 111(d).” Additionally, while the entire “Top 10 List” was clearly a tongue-in-cheek approach to some very serious concerns, #1 on this list is, perhaps, the most significant point the Commissioner made: “The EPA is underestimating higher resulting electricity rates.” For me, that is the ultimate issue. What will be the impact to consumers as a result of the EPA’s 111(d) guidelines?

***

John Howell is Vice President of Regulatory Services at Stateside Associates. With substantial policy and legal experience, Mr. Howell guides Stateside Associates’ regulatory counsel and provides clients with hands on Regulatory Issue Management support from strategic planning, regulatory advocacy, and working with groups of state and local officials.

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