## Allegheny Conference on Community Development Greater Pittsburgh Chamber of Commerce I Pennsylvania Economy League of Greater Pittsburgh I Pittsburgh Regional Alliance 

### Dennis Yablonsky EPA Hearing on Clean Power Plan

July 31, 2014

I am Dennis Yablonsky, CEO of the Allegheny Conference on Community Development, which for 70 years has been working to improve sustainable prosperity and quality of life in the Pittsburgh region. Key to achieving those goals here and across the country is maintaining a stable electric grid that delivers reliable and affordable power. But the electricity service that we take for granted is under stress from market dynamics, inadequate transmission infrastructure, too few new power plants to ensure sufficient supply, and new federal regulations. Unfortunately, the federal government does not have a plan to ensure the stability of the grid. Instead, it has undertaken a series of piecemeal and ad hoc actions without a full understanding of how they interact and impact the electricity grid. This winter proved how vulnerable our electrical supply has become. PJM Interconnection is the group that oversees the wholesale electric grid in Pennsylvania and all or parts of 12 other states, plus the District of Columbia. It must coordinate electricity delivery to meet the needs of 60 million people from nearly 1,400 generating sources that combined can produce 186,000 megawatts of power. And in January, PJM came within roughly 900 megawatts of running out of the electricity demanded. Nicholas K. Akins, CEO of American Electric Power, testified to the Senate in April that 89 percent of the coal-fired power plants that the company intends to shut down next year were needed by PJM during January's polar vortex. AEP has been sounding the alarm on long-term reliability for several years now and time is running out, he testified. Natural gas is supposed to take coal's place. But in January, when gas-fired generation was needed, many power stations found they could not get any fuel as natural gas companies diverted the gas to homes and hospitals to keep people warm. Together, coal, natural gas, and nuclear power account for 85 percent of the country's electricity generation. All three sectors are under stress. Today's focus is on new federal regulations that would ultimately reduce coal usage. At the same time, new nuclear power plants are almost impossible to build in this country and new federal regulations in that area could make it uneconomical for existing plants to keep operating. And there is other federal action underway that could make natural gas extraction more difficult. So where are we to get the electricity to keep the lights on? 

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Solar and wind must be part of the portfolio, but they do not yet have the utility-scale storage technology that is necessary to power an economy. Meanwhile, conditions keep changing, rapidly and for the worse. In Wisconsin, market distortions resulted in the Kewaunee nuclear power plant having to pay the transmission system to take the power it produced. So the plant's owner shut it down last year — 20 years ahead of schedule — and in the process wiped out 5 percent of the state's electric supply. The Kewaunee shutdown and the potential for dozens of others to follow "is a trend we are clearly very, very concerned about," according to DOE's Assistant Secretary of Nuclear Energy Dr. Peter Lyons. The country's current course is unsustainable. You will hear a lot today about how these proposed regulations will increase costs to consumers. The bigger problem is that we are on a course where customers may find they can't get electricity at any price. That's not an exaggeration. While in PJM we came close during the polar vortex, in South Carolina hospitals, schools, and tens of thousands of customers were subject to rolling blackouts because there wasn't enough of a margin when cold weather took out three power plants. The current rules aren't set up to provide adequate return to electric companies to build enough generation to maintain our margin of safety. Given the various federal, state, and local jurisdictions that touch on construction of power plants, natural gas supply pipelines, and electric transmission lines, major projects take years, without any clear way to jumpstart the process. The result is, that by the time the problem is obvious to customers on the street, any solution will be years away. You can't maintain a modern economy, or society, under those conditions. As Evan Bayh, former Democratic Governor and Senator from Indiana put it at a nuclear energy forum in Philadelphia in May, "We are sleepwalking into our energy future."

We cannot afford to do that. On behalf of the Allegheny Conference and the Greater Pittsburgh Chamber of Commerce, I am asking the president to stop ad hoc regulation and changes to the electrical system and appoint a task force with representatives from the EPA, the Depaitment of Energy, the Nuclear Regulatory Commission, the Federal Energy Regulatory Commission, regional transmission operators, electric generating companies and others to develop a national grid policy and an action plan to ensure an adequate, affordable, and reliable electric grid. Thank you.