Congressman Pete Olson

Representing the 22nd District of Texas

US CHAMBER ENDORSES OLSON BILL TO ENSURE ELECTRIC GRID RELIABILITY

May 16, 2012
Press Release

Washington, DC- Rep. Pete Olson (R-TX) today welcomed the U.S. Chamber of Commerce's endorsement of his bipartisan legislation, which would allow America’s power companies to comply with federal orders to maintain grid reliability during a power emergency without facing lawsuits or penalties for violating potentially conflicting environmental laws. Original co-sponsors of H.R. 4273: Reps. Mike Doyle (D-PA), Lee Terry (R-NE), Gene Green (D-TX), Adam Kinzinger (R-IL) and Charlie Gonzalez (D-TX).

Under current law, a company or individual can be held liable for violating environmental laws even when they are complying with a federal emergency order to generate power to avoid blackouts. In recent years, these conflicting federal laws have resulted in lawsuits and heavy fines for electricity providers complying with orders. 

"The Chamber of Commerce understands the importance of keeping the power on in our communities and not penalizing power producers for complying with federal orders," Rep. Pete Olsonsaid. "I'm pleased that our bill received their endorsement. This legislation has bipartisan support because it simply ensures a common sense solution to protect grid reliability when it is most needed."

Bruce Josten, U.S. Chamber of Commerce, Executive V.P. Government Affairs said, "H.R. 4273 would fairly protect generation operators from liability for bypassing Federal, State, or local environmental laws or regulations that conflict with a concurrent Federal directive to operate consistent with the public interest to maintain health and safety. This legislation enjoys bipartisan support and the bill’s focus enjoys the support of all four sitting commissioners of the Federal Energy Regulatory Commission."

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Electronic copy of the U.S. Chamber's letter of support for H.R. 4273:

CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA

May 15, 2012

Dear Chairman Whitfield and Ranking Member Rush:

The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, strongly supports H.R. 4273, the “Resolving Environmental and Grid Reliability Conflicts Act of 2012,” which would serve as an important tool to ensure that operators of electric generation facilities are not subject to an unreasonable choice of determining what law or regulation they should violate when undertaking actions to maintain the reliability of electricity in an emergency situation pursuant to the direct order of a Federal agency.

Federal Power Act (FPA) Section 202(c) provides the Department of Energy (DOE) with the authority to order the operation of electric generation facilities to maintain electric reliability. However, this law fails to provide any protection from liability to a generation operator in the event that such federally-directed operations lead to the violation of Federal, State, or local environmental laws, such as the Clean Air Act’s National Ambient Air Quality Standards (NAAQS). In addition, costly civil lawsuits may also be utilized to hold a generation owner financially liable for environmental claims resulting from the generator’s abidance with a DOE directive to operate.

Section 202(c) has twice been used to direct the operation of electric generation facilities upon a determination by the DOE of an existing emergency that will compromise the reliability of the electric system. In 2001, the Potrero Power Plant in the San Francisco area was directed to operate in excess of its 877 hour operating limit in order to maintain reliability in the wake of the California energy crisis. In 2005, the Potomac River Generating Station outside Washington, D.C. was directed to operate by the DOE to maintain regional reliability; such operation resulted in a single occurrence where the plant exceeded its 3-hour NAAQS limit. In each instance, the operator of the plant was subject to financial liability as a result of its compliance with DOE’s Section 202(c) directive.

While FPA Section 202(c) has historically been used quite sparingly, the injustice resulting from this law’s conflict with potential environmental law liability is likely to be more prevalent in the wake of the widespread retirement of electric generation facilities resulting from recently finalized Environmental Protection Agency (EPA) regulations applicable to that industry sector. Estimates of the total generation retirements to be incurred range up to 40,000 Megawatts, with approximately 25,000 MWin retirements already announced. It is not unreasonable to conclude that this unprecedented transformation of the electric generation fleet could lead to numerous local and regional reliability challenges that prompt the increased usage of the DOE’s Section 202(c) authority. Given these impending circumstances, now is the time to ensure that a conflict in laws does not impair the ability to maintain electric reliability in an emergency situation.

H.R. 4273 would fairly protect generation operators from liability for bypassing Federal, State, or local environmental laws or regulations that conflict with a concurrent Federal directive to operate consistent with the public interest to maintain health and safety. This legislation enjoys bipartisan support and the bill’s focus enjoys the support of all four sitting commissioners of the Federal Energy Regulatory Commission. The Chamber strongly supports H.R. 4273, and applauds the committee for its leadership on this important issue.

Sincerely,

Bruce Josten

cc: The Members of the House Committee on Energy and Commerce