US House Energy panel approves emergency reliability bill

June 7, 2012

Power generators scored a victory in their quest to eliminate the risk of environmental violations stemming from US Department of Energy orders to supply electricity during grid emergencies with the unanimous passage Thursday by the House Energy and Commerce Committee of a power subcommittee bill Thursday.

The bill (H.R. 4273) would amend Section 202(c) of the Federal Power Act so future DOE emergency reliability orders would shield generators from federal and state violations of the Clean Air Act and other environmental laws.

Representative Ed Whitfield, Republican-Kentucky, the subcommittee’s chairman, said he does not “believe this legislation gives generators a free pass on environmental The chairman of the House Energy and Commerce Committee, which oversees Whitfield’s panel, praised the work of members. The bill “protects our nation’s electricity producers from being penalized for violating a conflicting environmental law when they have been directed by the federal government to operate during an emergency,” Representative Fred Upton, Republican-Michigan, said in a statement.

“The bill addresses the basic principle that the federal government should not be able to direct a generator to operate for emergency purposes and then turn around and fine them for doing so,” Upton added.

Democrats remain concerned about what they see as the broad scope of the bill as evidenced by a statement from Representative Bobby Rush, Democrat-Illinois. Noting that Democrats are continuing to negotiate with Republican on the bill, Rush said he hopes the panel can “tidy up the language” to create a proposal that “is an example of common sense legislation that was brought about through compromise.”

The key Democrat sponsoring the bill, Representative Mike Doyle of Pennsylvania, said members of Congress “must put politics aside” and move the bill forward.

“While I’m not convinced that legislation on this matter is necessary, I could support a targeted fix that addresses the industry’s concern in a balanced way,” said Representative Henry Waxman, Democrat-California.

The bill enjoys the support of generators and industry trade groups including the Edison Electric Institute, the Electric Power Supply Association and others. GenOn, formerly Mirant, was the driving force behind the legislation.

Mirant was fined about $30,000 by the Virginia Department of Environmental Quality for violating emissions rules following DOE’s decision to issue a 202(c) order for the company’s Potomac River Generating Station near Washington. The coal-fired power plant supplied electricity to the Capitol and Pentagon.

Prior to the flap over the Potomac River facility, GenOn was forced to settle an environmental lawsuit with the City of San Francisco for pollution resulting from a 202(c) order that DOE issued to all generators during the California energy crisis of 2000-1.

“We are pleased that Congress has acknowledged the existence of a legal conflict that may prevent emergency operation of power plants subject to an emergency DOE reliability order. We hope the bipartisan effort continues and ultimately resolves the patently unfair possibilities where a company complies with an emergency order from DOE and is subject to enforcement from another agency or citizen lawsuit liability,” Debra Raggio, vice president and assistant general counsel at GenOn, said in an email.

The subcommittee also passed a bill (H.R. 5892) making minor changes to the US Federal Energy Regulatory Commission’s process for relicensing hydro facilities.

Upton touted the measure’s potential employment benefits. “Meeting the new hydropower project demand facilitated by this bill will create thousands of construction and manufacturing jobs to help stimulate the economy. Further, the electricity produced by these new projects will provide clean and low-cost power to American homes and businesses.”

Waxman called the hydropower bill “balanced, bipartisan legislation.”