In a new report, Further Preparing for EPA Regulations, the Regulatory Assistance Project (RAP) reviews pending public health and environmental regulations likely to have significant impacts on the electric system, and offers guidance to state energy regulators whose public utilities are faced with the challenge of achieving affordable environmental compliance while maintaining reliable electricity service.
With over a half-dozen regulations expected in the next several years, many state energy regulators find themselves having to reach beyond their traditional regulatory boundaries to understand the effects of public health and environmental regulations on the energy sector. The EPA and regulated entities too are being asked to move beyond their typical modes of operation. Further Preparing for EPA Regulations reviews new and pending water, solid waste, and air regulations and provides a variety of viewpoints for regulators to consider and build upon as they assess utility preparedness to respond to these challenges.
“Many of the pending regulations offer states a degree of flexibility in meeting emissions standards,” said Rich Sedano, principal and director of US programs. “Commissions should avoid an outcome in which they see no choice but to approve proposals to recover costs associated with compliance technology without appreciating alternatives that a utility might have considered in making its investment decision.”
Meeting this challenge requires up-to-date utility data and a methodical review of energy system “alternatives” specific to individual states and regions. The report reviews compliance alternatives, which include not only generation resources across the system, but also demand and delivery alternatives. With an understanding of available compliance options, utility regulators will be better equipped to identify choices that best suit their circumstances.
“We encourage state utility regulators to continue to engage with their counterparts in state and federal environmental agencies, and with their regulated utilities,” said David Farnsworth, senior associate and author of the report. “By engaging with other regulators and utilities on these topics, utility commissions will be better prepared to evaluate a wider array of compliance options, and to strike their preferred balance between costs and other public policy goals.”
Visit our Complying with Environmental Regulations page for additional RAP reports on the impact of environmental regulations on the utility industry.