EPA’s current efforts to curb CO2 emissions from power plants are controversial due to their potential impacts on the cost of electricity and the reliability of the grid given the announced retirements of many coal-fired plants. The ISO/RTO Council (IRC), representing the operators of the regional electricity grids, has made two proposals for managing regional compliance costs and reliability impacts that it recommends to be included in any final CO2 rule.

IRC’s first proposal is for a “Reliability Safety Valve” to ensure that any federal CO2 rule or state implementation plan includes a process to assess and, if needed, mitigate regional reliability impacts that result from compliance actions. The system operator would review states’ implementation plans, identify reliability impacts, and identify interim measures (such as keeping plants on line) until the long-term solution can be implemented. Assessments would be made on a rolling basis instead of on a static basis, and thus some flexibility on compliance dates would be necessary. In addition, because actions in one part of the grid can affect other parts, the impact of state implementation plans on regional dispatch would be evaluated so that regional issues and solutions may be identified.

The second proposal is for a “Regional Compliance Measurement” that would give states the option to use reductions achieved across the regional dispatch footprint to measure compliance with the CO2 rule. According to IRC, determining least-cost compliance over a very large multi-state region can optimize the efficiency of a compliance program for a broad fleet of generators and demand response resources. And the efficiencies of a multi-state approach are recognized even if the individual states do not agree on particular compliance strategies.

IRC’s proposals are intended as preliminary concepts to promote dialogue among policymakers, RTOs/ISOs and interested stakeholders. While not stated explicitly, the proposals presumably apply to both EPA’s proposal to limit CO2 emissions from new power plants (those whose construction started after January 8, 2014) as well as EPA’s upcoming proposal regarding existing plants to be issued by June 1, 2014.