Report: FERC Can Bypass Congress to Mitigate Climate Change
By Susan Gluss
A new Berkeley Law report calls on the U.S. Federal Energy Regulatory Commission (FERC) to mitigate the impact of climate change by enforcing laws already on the books. The report comes on the heels of President Obama’s push to expand the administration’s climate change agenda and reduce carbon pollution from power plants.
The report is the second in a series, “Addressing Climate Change Without Legislation,” which recommends steps agencies can take to both reduce emissions linked to climate change and increase clean energy use. The reports are joint projects of the University of California, Berkeley, School of Law, and the Berkeley Energy & Climate Institute.
The Federal Energy Regulatory Commission is an independent government agency within the U.S. Department of Energy. It regulates aspects of energy production, including the wholesale price of electric power, the rates for most electricity transmissions, and the licensing of hydropower plants.
“If Congress will not act to address climate change, FERC and other executive branch agencies must use existing legal authorities to do so,” Congressman Henry Waxman (D-Calif) said. “This report offers invaluable, breakthrough work in understanding the scope of executive authorities. It raises a number of options that FERC should consider seriously, including a strategy for putting a price on carbon in the wholesale power market.”
Adding a price to carbon is one of the more innovative ideas emerging among policy makers concerned about climate change. A so-called “carbon adder” would allow cleaner sources of power, such as wind and solar, to compete more effectively in the energy markets, according to report co-author and director of Berkeley Law’s energy program Steven Weissman.
“FERC can add the cost of carbon pollution to the price of power,” Weissman said. “It’s similar to the idea of a carbon tax: if you’re going to harm the common good, you have to pay more.”
Weissman, a lecturer affiliated with the law school’s Center for Law, Energy & the Environment, stressed the need for immediate action. The recent decade has been the hottest on record, linked to spikes in greenhouse gas emissions (GHG) that cause global warming, notably carbon dioxide. Electric power generation and delivery account for almost 40 percent of GHG, according to the Environmental Protection Agency.
Report co-author Romany Webb ’13 cites the Federal Power Act as a law that applies in this case. The act requires FERC to ensure that wholesale electricity rates are “just and reasonable,” Webb said. But in today’s competitive electric markets, rates don't reflect the social costs of climate change, putting renewable sources of energy at a disadvantage.
“The fact that pollution can occur without anyone paying for it is a market failure. But a ‘carbon adder’ would incorporate the costs of climate change. In effect, coal would have the highest added costs, while the costs for solar and wind would be lower,” Webb said.
Weissman and Webb urged FERC to accelerate actions to address climate change now that its full roster of commissioners has won senate approval.
The report’s recommended actions include the following:
- add the cost of environmental damage caused by energy producers to wholesale electricity prices;
- guarantee renewable energy providers a specified price for power they send to the electrical grid;
- encourage the development of offshore renewable energy projects by streamlining the approval process;
- require utilities to expand electric transmission capacities to serve renewable energy providers;
- insist that utilities adopt a fully integrated planning approach that compares various generation, transmission and energy efficiency options; and
- require natural gas companies to minimize the climate impacts of their operations.
The first report in the climate change series recommended steps the Dept. of Interior could take to lower carbon emissions under current law. The third report will focus on actions available to the Dept. of Agriculture.7/24/2014