Pick your fights

PJM and the PSC of Washington, D.C., have asked FERC to order Mirant Corp. to restart a chronically polluting coal-fired plant in Virginia that the company shut down in late August. The two petitioners say the lost generation could create an “emergency” that threatens the security of the capital’s energy supply and, consequently, national security as well. FERC should decline to intervene.

Just three weeks after the Federal Energy Regulatory Commission (FERC) was given the power to oversee promulgation and enforcement of mandatory reliability rules for U.S. transmission grids, the commission’s wisdom was put to the test. The salient question in the case involving Mirant Corp’s 500-MW Potomac River power plant in Alexandria, Va., is whether a potential threat to the energy security of the nation’s capital is sufficient to permit a plant to operate in noncompliance with federal air-quality standards. I say that FERC should not dignify the question by answering it, because doing so would overstep the commission’s authority and set a poor precedent.

Not a good neighbor

The background of the case reveals how mixing business, politics, and regulation can create a crisis. The Potomac River plant, with five 1940s-vintage coal-fired units, has long had an exceptionally poor environmental record marked by routinely high localized emissions of SO2 and particulates. During the 2003 ozone season, the plant’s NOx emissions were twice the permitted level. Citizens’ groups have called for Potomac River’s closure for over four years.

Negotiations between Mirant and the Virginia Department of Environmental Quality (DEQ) resulted in a consent order signed in September 2004. In it, Mirant agreed to conduct an air-quality study to determine whether key pollutants exceeded health-based standards and to reduce their emissions levels if that was the case. The results of the study, which was submitted to the DEQ on August 19, were not unexpected: “PM2.5, PM10 and SO2 maximum short-term impacts exceed the respective AQQS [ambient air quality standards] by between five and eighteen times. Areas of noncompliance are widespread and severe...on average, 24-hour impacts of SO2...equal three times the AAQS.”

The DEQ responded the same day by instructing Mirant to address the situation immediately and to inform the DEQ of steps it is taking by 2 p.m. on August 24. The company also responded immediately—by shutting down the plant on the 24th.

“We did the right thing and we’d do it again,” said Marce Fuller, Mirant’s president and CEO. “Mirant has a responsibility to deliver power to support the reliability of the electric grid, but it must also respect public health concerns. We did what any responsible company would do. Now we’re looking to the appropriate federal authorities to tell us to either keep the plant shut down or return it to operation.”

Try an end run

Potomac River’s shutdown raised immediate concerns at three entities: PJM, which oversees the grid in a broad region that includes metropolitan Washington; Pepco, which buys most of the plant’s output and distributes electricity in the nation’s capital; and the District of Columbia Public Service Commission (PSC).

In an “emergency petition” submitted to FERC on August 25, the PSC said that shutdown of the Mirant plant could have “a drastic and potentially immediate effect” on the reliability of the grid in the Washington area and could expose “agencies of the federal government and critical federal infrastructure . . . to curtailments of electric service, load shedding and, potentially, blackouts.”

The PSC went on to tell FERC that “immediate action by the Secretary of Energy and [FERC] is needed to avoid the potentially dangerous and security-threatening interruption of electric service to the District of Columbia that may occur” if the Mirant plant stays off-line.

PJM told FERC in its comments that “it is apparent that the loss of all units at the Potomac River plant for an extended period, coupled with the potential for loss of critical transmission lines, creates a significantly increased risk of losing a large block of load in the Washington area. PJM then proposed to FERC that Mirant be allowed and required to keep individual units at the plant “operating periodically and/or at a minimal output level to ensure that, if called on in an emergency, the plant would not require a lengthy startup [from] a ‘cold state.’”

Laws aren’t made to be broken

Meanwhile, the Virginia DEQ reminded FERC that the Potomac River plant was shut down for continued and serious violations of air-quality standards, and questioned whether the commission has the authority under the Federal Power Act to order the plant restarted except in the event of an emergency. Pepco and the PSC admitted in their petition that there was no immediate emergency, only that the potential for one existed.

A FERC spokesman said the commissioners are “deliberating,” and declined to predict how soon the commission might act on the request for FERC intervention. He added that such an intervention—ordering a plant to operate in violation of environmental laws—would be unprecedented. I believe that a decision by FERC to allow Potomac River to restart would break two laws—the Federal Power Act and the Clean Air Act—and set a very bad precedent just as the commission is about to begin policing U.S. transmission reliability. To FERC, I say: Pick the fights you can win.

At press time, the last words must go to Mirant, which told FERC in a September 1 filing that the plant remains fully staffed and “in a state of operational readiness,” and that the company “stands ready to continue discussions” to return the plant to operation as soon as possible.

That kind of attitude won’t get you invited to the next neighborhood block party.

Dr. Robert Peltier, PE Editor-in-Chief

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