Biden Authorizes Emergency Powers for DOE to Boost Transformer Production

June 7, 2022

Domestic production of transformers and other electric grid components will be fast-tracked under new authority granted to the Department of Energy by President Joe Biden—a remedy that augments recommendations by NRECA to address reliability concerns caused by the overburdened U.S. supply chain.

Biden signed orders Monday allowing DOE to use the Defense Production Act to help manufacturers increase their output of transformers, a move that NRECA said was necessary to meet demand in fast-growing areas of the country and for power restoration after storms and other disasters.

“For several months, America’s electric cooperatives have raised serious questions about supply chain disruptions to materials necessary for reliable operation of the nation’s electric infrastructure,” NRECA CEO Jim Matheson said in a statement.

“The Biden administration’s use of the Defense Production Act to shorten lead times for supplies of electric transformers is a much-needed step to support reliability and resilience.”

A recent report from the North American Electric Reliability Corp. confirmed that several states are facing reliability risks this summer from extreme weather and supply shortages.

Matheson said NRECA will continue to work with Washington policymakers on “additional measures” that will help ensure that co-op members’ lights stay on at a price they can afford.

“America’s electric cooperatives look forward to continuing to work with the Biden administration and Congress to reduce supply chain vulnerabilities in the short term while we increase domestic capability to meet our future needs,” Matheson said.

“A diverse energy mix that includes adequate baseload supply and an assured supply chain are essential to meet those expectations.”

NRECA also teamed with the American Public Power Association to urge DOE to suspend its efficiency rules on transformer manufacturers to allow increased production.

The DPA was first passed in 1950 to give the president certain emergency authority over the economy, including the power to suspend antitrust regulations or order private manufacturers to increase their output. It has been invoked during wartime, natural disasters, energy crises and the COVID-19 pandemic. 

Cathy Cash is a staff writer for NRECA.

Supreme Court: EPA Lacks Authority to Cap CO2 From Existing Power Plants

June 30, 2022

NRECA CEO Jim Matheson said the Supreme Court’s 6-3 ruling Thursday against the Environmental Protection Agency’s attempt to set carbon dioxide emission rates for existing power plants is a significant affirmation of electric cooperatives’ position in the case and will help co-ops’ efforts to keep power affordable and reliable.

“Today’s ruling clearly acknowledges that EPA overstepped its regulatory authority in the Clean Power Plan,” Matheson said June 30 after the court handed down its opinion in West Virginia v EPA.

“The court’s decision resets the agency to its appropriate regulatory path, requiring it to set achievable emissions guidelines that can be accomplished at existing power plants while also allowing states to consider local factors and have the final say on compliance options.”

The Supreme Court reversed and remanded a decision by the U.S. Court of Appeals for the District of Columbia Circuit that had upheld EPA’s Clean Power Plan to cap carbon emissions from the current fleet of coal-fired power plants.

The 2015 Clean Power Plan never took effect after opposition to the plan attracted a rare stay by the Supreme Court.

In the ruling released Thursday, the justices focused on whether Congress granted EPA authority to set carbon dioxide emissions that would shift generation resources away from baseload coal plants and toward renewable resources through what the majority opinion dubbed a “little-used backwater” of the Clean Air Act called Section 111(d). That section authorizes regulation of pollution from existing sources.

“On EPA’s view of Section 111(d), Congress implicitly tasked it, and it alone, with balancing the many vital considerations of national policy implicated in deciding how Americans will get their energy,” Chief Justice John Roberts wrote. “There is little reason to think Congress assigned such decisions to the Agency.”

Roberts added: “Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day.’ But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d).”

The majority concluded that limiting carbon dioxide emissions from existing power plants as the Clean Power Plan sought to do is outside EPA’s authority: “A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.”

NRECA supported an amicus brief filed by co-ops with the Supreme Court outlining key arguments as to why EPA’s Clean Power Plan was flawed and threatened electric reliability.

The rule’s “generation shifting” conflicted with the plain text of the Clean Air Act that preserves states’ authority to set emission standards for existing generating units within their borders, the co-ops told the court.

The D.C. Circuit of Appeals also ignored the Supreme Court’s “major questions doctrine,” which asserts that Congress must speak clearly when it assigns decisions of vast economic and political significance to a federal agency, the co-ops said.

Matheson said co-ops are doing their part to deliver electricity through a mix of reliable resources at a reasonable price, which is key given recent warnings by federal agencies of potential summer outages.

“Electric co-ops are investing in a diverse energy mix to keep the lights on reliably and affordably for American families and businesses,” he said. “The energy decisions we make today will determine whether there are sufficient resources for the lights to come on tomorrow.”

Cathy Cash is a staff writer for NRECA.