ERCOT says EPA’s rules may force power failures

Rolling blackouts will be much more likely in Texas next summer should new Environmental Protection Agency rules go into effect on Jan. 1 as planned, according to a report released Thursday by the state’s main electric grid manager.

The rules, which industry says caught it by surprise when they were unveiled in July, could lead to the shuttering of as much as 1,400 megawatts of coal-fired power plants capacity in Texas during the summer and up to 6,000 megawatts during other times of the year, according to the study by the Electric Reliability Council of Texas.

ERCOT has declared power emergencies several times this summer as record demand met unplanned power plant outages. Plant operators say the long, hot summer has meant more wear-and-tear due to longer operating hours for power plants.

On Aug. 4, the state came close to initiating rolling blackouts when the margin between power supply and demand grew too thin.

“Had this incremental reduction been in place in 2011, ERCOT would have experienced rotating outages during days in August,” the grid manager said in the study.

In July, the Environmental Protection Agency issued the final version of its Cross-State Air Pollution Rules, which require reductions in nitrogen oxide, sulfur dioxide and particulate emissions that cross state lines and contribute to ground-level ozone.

An earlier draft version didn’t mention Texas, but under the final rule, more than 25 percent of the reductions would need to come from Texas power plants beginning in January 2012.

Compliance plans being drawn up by power plant owners indicate about 3,000 MW of capacity would be brought offline during the off-peak months of March, April, October and November; and 1,200 to 1,400 MW for the rest of the year, including the peak load months of June, July and August, according to ERCOT.

Taking into account possible increases in maintenance work, the outages could reach 3,000 MW during March and April; 1,200 to 1,400 MW through the summer; and about 5,000 MW during October, November December.

If there are shortages of low-sulfur coal, the October, November and December outages could reach 6,000 MW.

In a statement EPA said its models show Texas has “an ample range of cost-effective emission reductions options for complying with the requirements of this rule without threatening electricity reliability or the continued operation of coal-burning units.”

“We look forward to meeting with ERCOT to discuss and review their analysis of the Cross State Air Pollution Rule,” the EPA statement continues.

A recent research report from Sanford C. Bernstein & Co. says that Texas coal plants could meet the new emissions restrictions if they used their existing scrubber systems for longer periods.

Plants without such scrubbers could meet the new standards by mixing their lignite with lower sulfur coal, the study says, such as that produced in Wyoming’s Powder River Basin. Such moves likely would increase power costs, according to the report.

But in a conference call with reporters Thursday, ERCOT’s system planning manager Warren Lasher said running the scrubbers around-the-clock would not significantly change the overall emissions from the plants since those facilities with the scrubbers already operate them for most hours of the day.

He also said the existing coal supplies and railroad infrastructure may not be sufficient to meet a switch over to low sulfer coal.

“If the implementation deadline… were significantly delayed, it would expand option for maintaining system reliability,” the ERCOT report said.

ERCOT and Texas power plant owners have other options for maintaining grid reliability and responding to the impending measures.

ERCOT could ask power plant operators to bring more units out of mothballs — most of them older natural gas fired units — to have them ready for peak demand.

Four power plants were brought out of mothballs in the last few weeks to help the state through the rest of the summer, while NRG Energy was told by ERCOT this week it could not put another plant into mothballs this winter.

ERCOT could also try to expand two existing programs designed to get commercial customers to cut back usage on short notice during peak demand.

There is also a proposal under discussion to double the price ceiling in the spot power market to $6,000 per megawatt-hour as a way to encourage more power plant operators to fire up their units.

The Sierra of Texas also noted the companies could also meet their emissions goals by taking part in a NOx and SOx emissions trading program that accompanies the new EPA rules.

The threat of power reliability problems could create political pressure to delay the implementation of the new rules, however, says Kevin Book and Chase Hutto, principals in the energy policy consulting firm Clearview Energy Partners.

President Barack Obama may feel like he needs to continue to stand by the EPA time frame to satisfy some of his core constituents, while the last minute addition of Texas to the rules may give Republican House members the incentive to block the measure in the courts even before next year’s elections.

“For a president pinned between a green base and an anemic recovery, the best political outcome may be for the White House to stand behind EPA rules as eithe rCongress or the Courts intervenes to delay them,” the analysts wrote.

36 Comments

  1. outsidelookingin

    At first I thought you were talking about the LHN!!!

    #1
  2. shockwave

    If the commercial power companies are unable to provide power, preferring to restrict supply and drive up prices without having to build plants, then this entire “free Market electricity” experiment is a bust.

    It was supposed to be reliable – it’s not.
    It was supposed to lower prices – it hasn’t.
    It was supposed to competitive – consolidation is eliminating that.
    It was supposed to guarantee investments in plants – where are they then?

    The business of electricity has become one of just a handful of companies owning the plants. And rather than spending money by building new ones, they can make more profit by shutting down one or two at peaks and driving the prices up. With supply and demand, there is no reason to build new plants as you make more by restricting the supply.

    Before this open market went into effect, the only time I experienced rolling blackouts was back on Guam. And it saddens me greatly to watch my once-proud state which could claim the title of the Energy Capital of the World reduced to the same level as Guam.

    #2
  3. ENE

    Shockwave,

    Study up on power in Texas before you post something ridiculous like that post.

    #3
  4. 42

    People need to stop building McMansion’s: It takes a lot of energy to cool those suckers down!

    #4
  5. airdale

    Four million people have moved to this state in the last ten years and how much extra electric capacity has been added in that time? None I’ll bet.
    The Gov likes to spout off in his Presidential run about drawing jobs to this state but if water, electric, highway, school and sewage infrastucture is not upgraded to handle the extra bodies then “Houston we have a problem!”.

    #5
  6. Joe W

    Shockwave is right – this is the result of deregulation, nothing more. States with properly regulated utilities aren’t experiencing anything like this at all (not even California, now that ENRON’s out of the picture).
    It’s time for consumers in Texas to take control back from the market!

    #6
  7. Godiva55

    Texas would have faced blackouts last month had Environmental Protection Agency rules …been in effect,
    +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
    Then tone down the EPA and their idiot rules.

    They are out of control.

    We would have blackouts because of their rules???

    #7
  8. 666_deception

    Just another deathgrip on society! Perry to the rescue my hero!Figures your gonna promise this now, what hell have you been doing!Oh yea running for president!

    #8
  9. Katie

    Wondering why the author chose to define ERCOT as a ‘nonprofit’ and not ‘one of the many nonprofit pseudo-goverment agencies established by the state of Texas.’

    Also, I was unaware that labor unions had an affinity to sulfur-dioxide pollution.

    #9
  10. olddispatcher

    So Perry wants to stand up to the destructive Federal Overreach? How about this: Working with the Feds like a grown-up to determine the extent of the problem, if a problem exists, and what to do about it in a way that is the most cost effective?

    We have to have electricity, and having lived in areas of smog and areas with clean air I will always long for the clean air. Is it possible to have both? I can’t answer that since in I am not in the power production business.

    But my biggest fear is that we will never know. Not as long as Perry refuses to understand there is a problem and/or refuses to do anything about it.

    #10
  11. luckyone

    One more reason to get rid of Obama and his regime.

    #11
  12. 666_deception

    I dont believe in killing the planet but i’m sure you people can find some way to have cleaner and more efficent way to make energy!Hell i’m sure some of these nasa people that are laid off need a job!

    #12
  13. Dave

    Airdale is right, we have had a population boom in the state and our infrastructure has not been improved to cope with it.

    It takes years to bring new a generation facility on line. Think about the time it takes to get permitting, to engineer the facility, to construct the facility, and to eventually connect it to the grid. I’d bet we couldn’t get a new generation facility on line in less than three years.

    It may be possible to put scrubbers on the offending facilities, but the technology is expensive and a similar, albeit shorter, permit/engineer/build cycle exists for that, too.

    So there is no quick fix. The EPA will close offending generation facilities, and Texans will pay with several years of rolling blackouts.

    I remember hearing about this several years ago, so I have trouble believing it’s a surprise to the electric generation companies. If there’s a target for blame here, it probably is these companies and their beancounters.

    Of course, pointing fingers doesn’t solve anything. Texans are going to have to learn to deal with an unreliable electric system which will fail at the worst possible times (extreme heat and extreme cold).

    For those that can afford it, it may be time to invest in a whole-house generator and solar panels; for those that can’t … well, they’re S.O.L. just like always.

    It would be interesting to hear the business viewpoint on this. How would the prospect of unreliable utilities influence a business owner when it comes time to expand, or establish a new business – especially manufacturing. Faced with the prospect of several years of unreliable electric service, would businesses look at leaving the state?

    #13
  14. Greg

    All we need to do is add a few million electric cars to the grid like Obama is asking for.

    #14
  15. Jp

    olddispatcher wrote:
    “How about this: Working with the Feds like a grown-up to determine the extent of the problem,”
    ——————
    You’re not actually naive enough to believe that the feds of any level are going to work with Texas like “grown-ups”, are you?
    You need to wake up to reality and realize that there is an agenda in place here. If you can’t see it, you’re fooling yourself.

    #15
  16. David

    Next year is an election year. No way is Obama going to hand republicans a soundbite like “EPA regulations force power plants to close, leading to blackouts”. The EPA will either:

    1. Grant waivers.
    2. Create phantom emission permits that will be paid back in future years.
    3. Delay the rules entirely.

    #16
  17. pdh42

    I do wonder what the fools who voted for the fool in the White House think about his hope and change now???? It is NObama’s EPA Nazis who are doing this to Texas…. They are not only going after the electrical producers they are going after the refinery’s too…… They are going to put many more out of work AND the price of electricity will skyrocket…. Of course that is exactly what Nobama wanted to begin with as he said that he thought that electicity prices should be 3 times what they were, and that gasoline should be $7 to $8 dollars per gallon…. And what is funny about all of this is that the LSMedia like the Chronicle and this writer who wrote this story are applauding him for doing it……

    #17
  18. Maybe it is time to disolve ERCOT and tie them into either Eastern Grid or the Western grid. What we have now is not working.

    #18
  19. pdh42

    olddispatcher why dont you move to where this so called clean air and cheap electricity is…. You know why you are moving there because it only exists in your own little mind……

    #19
  20. cannedspaghetti

    We have been goverened by God’s Own Party for all these years can it be we are not prepared? Kind of like 9/11 where the party of that claims to be keep us secure gets us clobbered.

    #20
  21. Jackalope

    Not mentioned in this article are the gas and coal-fired plant that have closed the past 2 years with the expectation wind and solar could replace the lost output. Didn’t work. Last winter, there wasn’t enough wind to keep the Panhandle warm, so they had rolling blackouts here in Houston so our electricity could be transmitted to the Panhandle. Wind and solar will not replace natural gas and coal. There’s too much demand.

    #21
  22. Tom Fowler

    Jackalope
    The rolling blackouts in the winter didn’t really have much of anything to do with sending power to the Panhandle. If wind was more reliable and there were existing power lines from West Texas to the rest fo the state it could have helped the Feb. problem. But that wasn’t the cause of the problems.

    #22
  23. Hank

    ERCOT is just building their case for more high voltage lines through prime ranch and farm land to support their Fayetteville-Zenith Project.

    #23
  24. TXSFRED

    “We have been goverened by God’s Own Party for all these years can it be we are not prepared? Kind of like 9/11 where the party of that claims to be keep us secure gets us clobbered.”

    Dear Canned Spagetti, Bill Clinton had two if not three shots at Osama bin Ladin and didn’t take them. Now what does this have to do with electricity? I guess it is that little electric THRILL these leftie dimwits you support run up your leftie dimwit leg…:-})

    #24
  25. Jackalope, on that note, when green companies that received millions of stimulus $$, are now bankrupt, closing their doors and laying off their entire workforce, it just re-enforces the argument that green energy is too expensive for the vast majority of the public, and therefore not viable at this time.

    #25
  26. tsujones

    convert the coal to gas and move on. Sounds like another shovel eady project that will not be funded until the republicans can take credit for it. just like getting America back to work.

    #26
  27. cxd

    Per the Weather Channel a few weeks back, they say to expect even worse droughts/heat in 2012…. Just can’t win. Hopefully they are wrong….

    #27
  28. Flippy

    Hope and Change – We all need to sacrifice comfort and expect sky rocketing utility prices so we can go GREEN! Funny how Al Gore’s net worth has skyrocketed during these trying times. What from a mere 2 million to over 100 million dollars in the past 10 years. Funny how Obama and GE are so close and GE has made enormous tax free profits. So you just need to sit back and enjoy what majority of the country voted for in 2008. The future of our once great country is more third world than you think.

    #28
  29. JackHughes

    Deregulation = maximum profits and minimum service.

    #29
  30. olddispatcher

    Phd42….

    I have a home in Oklahoma that I spend a lot of time at in the summer. Clean air, cheap power, lots of water, great roads, 5.4 unemployment rate and a government that works non-stop to make this a better place to live.

    It is just six hours from Houston and the difference is like night and day.

    You should get out more. The only place all of this does not exist in is your own little mind.

    #30
  31. olddispatcher

    Jp….

    I work with the Feds on many levels and have for about the last 40 years.

    You need to wake up and understand anything is possible if you put your mind to it.

    Agenda? Grow up and quit paying attention to the right wing noise machine.

    #31
  32. YeahBuddy

    True, some folks need uncle governmment to tell them when to run the A/C, and when to turn on a light, and when to flush their government-approved toilet. “Sorry, buddy… you’ve used up too much toilet time. You can’t poop until next Wednesday.”
    I can regulate my thermostat on my own, thanks, but if you can’t, then that’s your problem.

    #32
  33. SarahATP

    Just more fear mongering to help shore up the stance of “deregulation” politicians… ummm… like Perry. Estimates are showing that Texas will be over $100 billion short for highway funds next year.

    When Texas’ roads start crumbling and there’s no money to repair or replace them… are we to blame Obama then too because Texas gets an “F” for infrastructure upkeep and management?? Or will we contract everything out to a Spanish company that will turn all our highways into tollways. Remember… no new taxes (just lots of new fees).

    #33
  34. Yep, we're screwed

    Screw the corporate enterprise; bring back the one world order on monopolistic power.

    #34
  35. willrogers

    This is just ERCOT, a government arm of the energy generators, paid for by consumers, telling you the energy producers want to jack prices again, and too boot, they try to blame President Obama.
    For those that say they were “surprised” by the “new” rules I call a BS. These “new” rules are just the enforcement stage of the 1997 ozone and fine particle and 2006 fine particle National Ambient Air Quality Standards.
    Glad I locked in for 3 years at 10.1 cents per kilowatt hour for 3 years. A friend told me I should go year by year but I knew the greedy billionaires could not keep from jacking up prices in an all Republican state where they have free rein.

    #35
  36. willrogers

    BTW, those power lines near Clear Lake shown in the picture are unused power lines that connected to a gas generation plant in Bacliff that was shut down a few years ago when deregulation took over.
    Reduce supply, raise price, the new “free market”.

    #36