Emergency Application — North Dakota, et al., Applicants v. Environmental Protection Agency, et al.

USCA Case #24-1119

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My name is Julie Fedorchak, and my business address is 600 E. Boulevard Ave. Dept 408,

Bismarck, ND 58505. I am over the age of 18, have personal knowledge of the subject

matter, and am competent to testify concerning the matters in this declaration.

2.

I have served as one of three commissioners on the North Dakota Public Service

Commission (NDPSC) since 2013. I am currently President of the National Association of

Regulatory Utility Commissioners (NARUC), the state's liaison to the Midcontinent

Independent System Operator (MISO), and on the advisory board of the Electric Power

Research Institute. I have previously served in numerous leadership roles including

President of the Organization of MISO States (OMS), vice-chair of the NARUC Gas

Committee, and vice president of the Gas Technology Institute's advisory board.

3.

The NDPSC is a state agency created under the Constitution of North Dakota and is vested

with, among other things, jurisdiction for the economic regulation of electric and gas public

utilities, telecommunications, the siting of energy plants and electric and natural gas

transmission facilities, reclamation of active and abandoned mine lands, and railroad

safety. The Commission also actively participates in the governance of MISO through

OMS and Southwest Power Pool (SPP) through the Regional State Committee (RSC).

4.

The NDPSC is responsible for ensuring safe, affordable, and reliable electric and gas

services for North Dakota ratepayers. It oversees the orderly development of capitalintensive infrastructure of investor-owned utilities within the state, including generation

resource planning. Furthermore, the NDPSC serves as the siting authority for energy

generation, gas processing, and pipeline and electric transmission within the state.

5.

I am submitting this declaration in support of Petitioners' Motion to Stay the Final Rule,

published by the U.S. Environmental Protection Agency (EPA) on May 7, 2024, entitled

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"National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric

Utility Steam Generating Units Review of the Residual Risk and Technology Review," 89

Fed. Reg. 38508 (Final Rule).

6.

The NDPSC has consistently highlighted risks associated with the transition from

traditional thermal generation and has serious concerns that the Final Rule will further

undermine the reliability of the power grids in North Dakota and around the country. I

recently highlighted our concerns to Congress and FERC, expressing the critical need to

extend the lives of existing thermal resources to allow time for new technology to "bridge

the gap" between "reliability attributes of wind and solar megawatts versus thermal

megawatts."1 Since then, trends and forecasts have called for considerable load growth,

making it abundantly clear that this is not an energy transition at all. We are in a period of

energy expansion heightening the risks to which I testified to.

7.

The NDPSC has already expended significant amounts of staff time and resources trying

to determine and mitigate the impacts that the Final Rule will have on the ability of the

people of North Dakota to have access to reliable, affordable electricity. Absent a stay of

the Final Rule while litigation challenging it is pending, NDPSC anticipates further

dedicating thousands of hours of staff time and hundreds of thousands of dollars attempting

to understand and mitigate the adverse effects the Final Rule will have on the power grids

providing electricity to North Dakota's citizens. Those costs will not be recoverable if the

Final Rule is ultimately held unlawful. Staff time and resources that NDPSC must dedicate

' See Pathways to Lowering Energy Prices: Hearing Before S. Comm. on Energy & Nat. Res., 117th Cong. (July 13,

2022) (testimony of Comm'r J. Fedorchak, Chair, N.D. Pub. Serv. Comm'n). AD23-9 Annual Reliability Technical

Conference, Tr. at 239: 1 (Nov. 9, 2023) (Comm'r Fedorchak).

<https://www.energy.senate.gov/services/files/E565FF3C-3B1B-42CD-A4C0-68ED082CC280>. See also AD23-9

Annual Reliability Technical Conference, Tr. at 239: 1 (Nov. 9, 2023) (Comm'r Fedorchak).

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to understanding and trying to mitigate the effects of this Final Rule detract from the

NDPSC's ability to fulfill its obligations to the people of the State.

8.

The NDPSC has very serious concerns that the Final Rule will undermine the reliability of

the power grids that provide electricity for the people of North Dakota. An unreliable

power grid would cause the State to experience blackouts and would result in significantly

higher prices for electricity in North Dakota. The seriousness of these concerns cannot be

overstated.

9.

The NDPSC is not alone in its reliability concerns. FERC, NERC, and other entities

charged with overseeing the reliability of our power grids all around the country have in

recent years been shouting warnings about the long-term reliability of our nation's power

grids for anyone willing to listen. NERC recently stated that the bulk power system has

reached an "inflection point" in which the risk profile to customers is steadily deteriorating

due to the retirement of valuable generation resources outpacing the addition of new

dispatchable generation.2

10.

In its 2023 Long Term Reliability Assessment, NERC identified that the SPP region will be

at an "elevated risk" of shortfall in extreme conditions, such as the recent winter storms.

This risk is more prevalent when high demand coincides with low wind or above normal

generator outages.3 As recent as this past January, North Dakota experienced recordbreaking cold temperatures during which SPP declared extended cold weather and

conservation operation advisories. Concurrently, the weather prevented many generators

from running. The combination resulted in multiple severe reliability emergencies.

2 The Reliability and Resiliency of Electric Service in the United States in Light of Recent Reliability Assessments

and Alerts: Hearing Before the Committee on Energy and Natural Resources (June 1, 2023) (Statement of James B.

Robb, North American Electric Reliability Corporation).

3 Id. at 8.

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NERC has identified even more risk in MISO, a regional transmission organization (RTO)

serving parts of North Dakota, projecting a "high risk" level indicating insufficient resource

adequacy for areas.4 This indicates that the electricity supply for these areas is more likely

to be insufficient in the forecast period and more firm resources are needed. While MISO

has trended up in installed capacity, accredited capacity that can be relied upon to meet

peak system needs is moving in the opposite direction. MISO's recent accreditation

reforms have shown that this trend is likely to worsen.5

12.

MISO released the following statement regarding long term grid reliability:

There are urgent and complex challenges to electric system

reliability in the MISO region and elsewhere. This is not just

MISO's view; it is a well-documented conclusion throughout the

electric industry. ...

Many dispatchable resources that provide critical reliability

attributes are retiring prematurely due to environmental regulations

and clean-energy policies. ...

The new weather-dependent resources that are being built, such as

wind and solar, do not provide the same critical reliability attributes

as the conventional dispatchable coal and natural gas resources that

are being retired. While emerging technologies such as long

duration battery storage, small modular reactors and hydrogen

systems may someday offer solutions to this issue, they are not yet

viable at grid scale.6

13.

Warnings of this nature are not typical from RTOs like MISO, which are generally policy

and politics neutral. However, they have a responsibility to ensure our country's power

grid remains reliable. This warning from MISO should be taken seriously.

4 Id.

Midcontinent Independent System Operator (MISO), Managing Reliability Risk in the MISO Footprint (June 16,

2022), available at https://cdn.misoenergy.org/20220616%20Board%20O)/020Directors%20Item%2008a%20

Reliability%20lmperative625168.pdf.

6 Midcontinent Independent System Operator, "MISO's Response to the Reliability Imperative," at 2 (Feb. 2024),

available at https://cdn.misoenergy.org/2024%20Reliability%20Imperative%20report%20Feb.%2021%20

Final504018.pdf?v=20240221104216.

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To underscore our concerns, the loss of a single thermal plant could be the difference

between a stable grid and load shedding or brownouts in North Dakota and the surrounding

regions. During Winter Storms Uri and Elliott, Coal Creek Station, a unit capable of

dispatching 1,150 MW of power into the MISO market, operated at maximum capacity

during both winter storms. This resulted in a higher capacity rating due to Coal Creek's

value in maintaining reliability. Any negative impact to this one generator's capacity for

generating electricity for the grid has the potential for an immediate and significant impact

on the MISO North Region and North Dakota customers.

Impact of the Final Rule on North Dakota's Power Plants and Power Grids

15.

The Final Rule will require lignite-fired electric generation units (EGUs) in North Dakota

to determine whether to spend an extraordinary amount of money to come into compliance

with the Final Rule, or to close their units either because compliance with the new standards

is not technologically feasible or compliance with the standards would render their

operations no longer economically viable. The NDPSC's review of the State's EGUs has

provided merit to our concerns that the economics and technical infeasibility created by the

Final Rule makes power plant closures a likely reality. This will have a profound impact

on the citizens of North Dakota. There will also be regional impacts across the MISO and

SPP systems at times when people and communities are most vulnerable to life threatening

weather events.

16.

The forced, premature retirement of dispatchable fossil fuel generation in North Dakota

will increase reliance on intermittent sources of power (e.g., wind and solar). An increased

reliance on intermittent resources will result in a markedly lower accredited capacity value

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for those resources in the future, signaling that such resources will increasingly have

difficulty serving load during all hours.

17.

Regional Transmission Organizations, Public Service Commissions, and similar entities

across the country have been warning that projected increases in intermittent generation

resources will be unable to resolve the reliability issues that result from the forced

retirement of dispatchable generation resources.

18.

MISO recently reiterated that warning in its "MISO Region Reliability Imperative" report:

Wind resources can experience "fuel" availability challenges in the

form of highly variable wind speeds. Consequently, the energy

output of wind can fluctuate significantly on a day-to-day and even

an hour-by-hour basis — including multi-day periods when output

drops far below average.

For example, over 60 consecutive days in January-February 2020,

hourly wind output in MISO averaged more than 8,000 MW.

However, ... for 40 consecutive hours in the middle of that 60-day

block, average hourly wind output dropped to less than 47 MW, and

only once exceeded 200 MW in any single hour.

An even longer and broader "wind drought" occurred during Winter

Storm Uri in 2021 when the MISO, Southwest Power Pool, Electric

Reliability Council of Texas and PJM regions all experienced 12

consecutive days of low wind output.7

19.

The forced retirement of reliable, dispatchable power generation sources has already

significantly threatened the reliability and resilience of the power grids even in states like

North Dakota where we invest heavily in dispatchable resources — especially during

severe weather events. High load growth magnifies this problem. Implementation of the

Final Rule will foreseeably make an already precarious situation even worse.

7 Midcontinent Independent System Operator, "MISO's Response to the Reliability Imperative," at 11 (Feb. 2024),

available at https://cdn.misoenergy.org/2024%20Reliability%20Imperative%20report%20Feb.%2021%20

Final504018.pdf?v=20240221104216.

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The NDPSC has also determined that in North Dakota, intermittent generation resources

like wind and solar, while providing value as energy and capacity resources, are energy

limited and cannot replace attributes from coal-fired EGUs that will be affected by the

Final Rule, including on-demand dispatchability. Coal-fired plants provide essential

reliability services such as frequency support and spinning reserves, along with voltage

regulation. The grid operators use these services to operate reliably under an array of

system conditions, generally without the concern of having too few of these services

available. Merely having capacity does not equate to having necessary reliability services

or ramping capability to balance generation and load.

21.

Furthermore, MISO has flagged that voltage instability challenges within the next five

years are strongly correlated with today's aggressive pursuit of weather-dependent

resources by many states.8 MISO's Renewable Integration Impact Assessment study

determined that stability-related challenges are projected to reach a tipping point when a

30% renewable threshold is reached, which is projected to occur around 2027. The grid

stability-related challenges from increased renewable integration will also drive mitigation

capital cost.

22.

A lack of voltage stability could result in loss of load in an area or protective system

tripping of transmission lines or system components, leading to cascading outages.

Voltage collapse, one potential result from voltage instability, has been identified as a

contributing factor in large scale blackouts across the globe, including Scandinavia (2003),

Northeastern U.S. (2003), Athens, Greece (2004), and Brazil (2009).

During the

Northeastern U.S. event in 2003, voltage stability resulted from multiple line tripping

8 Pg 36 of https://cdn.misoenergy.org/2023%20Attributes%20Roadmap631174.pdf.

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contingencies, causing voltage fluctuations, reactive power deficiencies, and the tripping

or malfunctioning of generators and transformers.

23.

The State's lignite coal plants have the capability to respond to frequency and voltage

changes and actively provide these services to the market.9

North Dakota's lignite

resources also have fuel supply reserves in near proximity to the plant, and in many cases

are mine-mouth, protecting them from supply chain disruption.

24.

In short, the forced retirement of reliable, dispatchable power generation resources has

already significantly threatened the reliability of the power grids that provide electricity to

the people of North Dakota, especially during extreme weather events. Implementation of

the Final Rule will foreseeably make an already precarious situation even worse.

Impact of the Final Rule on North Dakota's Electricity Pricing

25.

EPA's claims that the Final Rule will not affect the price of electricity in the nation are not

true for North Dakota.

If a stay is not granted, North Dakota lignite EGUs will

immediately incur significant investment cost to become compliant or be forced to begin

winding down operations. The economic or technical infeasibility of complying with the

Final Rule will inherently subject ratepayers to stranded costs pancaked with replacement

generation and transmission infrastructure investment.

26.

Using just one North Dakota coal-fired power plant as an example, if Coyote Station can

successfully implement necessary technology for compliance with the Final Rule, that

plant alone is anticipated to pass through over 2 million dollars of additional annual

revenue requirements onto consumers, resulting in at least a 0.5 percent increase in rates

to North Dakota customers. That is just the compliance costs associated with one plant.

9 NERC 2022 Long-Term Reliability Assessment, pg 19 in document. December 2022. https://www.nerc.com/

pa/RAPA/ra/Reliability%20Assessments%20DUNERC_LTRA_2022.pdf.

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Similar rate impacts are anticipated for Northern States Power customers for the state's

jurisdictional allocation of costs for upgrades to their existing coal facilities. It is also

worth noting that implementation of the necessary technology to meet compliance for

Coyote Station is far from a sure thing. In the event that compliance cannot be met for that

plant, NDPSC estimates that the cost for replacement generation will increase rates by 510 percent for many North Dakota ratepayers.

27.

Replacement generation will likely require billions of dollars of investment in gas

generation and transmission infrastructure.1° Firm service contracts will also be necessary.

The increased reliance and demand for natural gas will put upward pressure on the

commodity, increasing the price of the fuel supply for both electricity and natural gas utility

service for ratepayers, and increase price volatility during times of extreme weather.11

28.

For example, during the 2021 Storm Uri, excess demand in our region created extreme

competition that caused high spot pricing resulting in a total of 45.9 million dollars of under

collection and notable rate impacts to North Dakota gas customers over amortization

periods of 16 to 24 months.12 During this period, the NDPSC received an abundance of

calls from struggling residential customers and industrial customers having difficulty

maintaining operations. And this was a far cry from the natural gas turmoil experienced in

states like Oklahoma, where the Corporation Commission required securitization to

I° Basin Electric recently announced construction of a 1,400 MW gas-fired generation facility in North Dakota that

will require billions of dollars of investment and would use about 7% of the natural gas currently produced in North

Dakota. See https://northdakotamonitor.com/2024/05/15/utility-plans-another-gas-fired-power-plant-for-northdakota/.

" See Great Plains Natural Gas Co., Cost of Gas 2021, Application for Variance, Case No. PU-21-10, available at

https://www.psc.nd.gov/database/documents/21-0010/028-020.pdf; Montana-Dakota Utilities Co., Cost of Gas

2021, Application for Variance, Case No. PU-21-8, available at https://www.psc.nd.gov/database/documents/210008/029-020.pdf; and Northern States Power Company, Cost of Gas 2021, Application for Variance, Case No. PU21-9, available at https://www.psc.nd.gov/database/documents/21-0009/055-020.pdf.

12 Montana-Dakota 12.8 million; Great Plains Natural Gas 593k, and Northern States Power Company 32.5 million.

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amortize $675 million in fuel costs over 20 years to reduce what would have been an

estimated $476 residential charge per month per customer to a more manageable rate.13

29.

Furthermore, closure of the thermal generation and the replacement with intermittent

renewable resources will drive down accredited capacity values of current renewable

generation units owned by our regulated utilities — driving down the value of existing

renewable generation and requiring additional investment in resources with capacity value

to meet reserve margin requirements. The foreseeable cascading cost impacts and grid

reliability risks associated with the Final Rule are unacceptable if ensuring access to

reliable and affordable power is one of the most important imperatives of government.

30.

The closure of thermal generation units in North Dakota would also foreseeably have

immediate and negative impacts on the price of energy to electricity customers in the

region. The existing transmission system was designed and built to ensure delivery of

power from all North Dakota generation units primarily to customers within the state, with

approximately 35% of energy generated within the state currently exported outside of our

borders.

31.

Our neighboring states have relied upon the energy generated in North Dakota for many

decades, and do not currently have available resources to serve both their own needs and

North Dakota's needs if North Dakota's coal-fired plants are forced into early retirement

by the Final Rule. This scenario would result in significant congestion across the

transmission system of both MISO and SPP, which would significantly drive up energy

prices for customers in both RTOs.

13 See https://oklahoma.gov/occ/news/news-feed/2022/commission-approves-order-on-pso-february-2021-stormcosts.html. Final Financing Order, Order No. 723434, https://imaging.occ.ok.gov/AP/Orders/occ30453173.pdf.

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One very recent example of how dramatic the cost of congestion can be is a very localized

transmission constraint in northwest North Dakota. Due to a relatively small (200MW)

load addition in the area, the congestion pricing in the region over the course of six months

totaled up to $18 million to customers of Montana-Dakota Utilities Co. alone.14 Comparing

the impact of that event to the Final Rule potentially removing nearly four thousand

megawatts of thermal generation, the pricing impacts on North Dakota electricity

consumers can foreseeably be anticipated to be severe.

33.

In short, the Final Rule will have a clear and dramatic impact on rates and risks to North

Dakota ratepayers, even if all North Dakota power plants are able to comply with the Rule

and remain economically viable in the long-term, which is far from a certainty. As with

all rate impacts, the most significant impact will be on low-income North Dakotans, as

high energy prices operate like a regressive tax. But the impact will be felt by all North

Dakotans, who will have no choice but to retain service at higher rates. For people and

businesses, electricity and natural gas heating is a requirement, it is not a luxury that can

be set aside if the Federal Rule causes energy prices to increase dramatically.

34.

The Final Rule also recklessly interjects the EPA into areas traditionally reserved for

States, FERC, and RTOs. State utility commissions have traditionally had a reserved

authority to establish their own energy and environmental policies, including the authority

to determine their own preferred generation mixes, as long as they do not interfere with

wholesale markets.15 This rule mutes the NDPSC's careful consideration of rates, utility

14 See Montana-Dakota Utilities Co. v. Midcontinent Independent System Operator, Inc. and Southwest Power Pool,

Docket No. EL-24-61-000 (Jan. 23, 2024).

15 See, e.g., Hughes v. Talen Energy Mktg., LLC, 570 U.S. 150, 154 (2016) ("The States' reserved authority includes

control over in-state `facilities used for the generation of electric energy.'" (quoting 16 U.S.C. § 824(b)(1)) (citing

Pac. Gas & Elec. Co. v. State Energy Res. Conserv. & Dev. Comm'n, 461 U.S. 190, 205 (1983) ("Need for new

power facilities, their economic feasibility, and rates and services, are areas that have been characteristically

governed by the States.")); id. at 166 ("Nothing in this opinion should be read to foreclose Maryland and other

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investments, and its vested role in ensuring the orderly development of generation and

transmission infrastructure within North Dakota.16

35.

Indeed, to the extent that the Final Rule creates disruptions in electricity reliability—

brownouts or blackouts—the Final Rule will have far reaching direct, indirect, and tertiary

impacts throughout the State.

36.

Any changes to the electricity generation portfolio caused by implementation of the Final

Rule will be immediate, irreversible, and will likely impact North Dakotans for decades,

even if the Final Rule is overturned in litigation.

37.

In summary, NDPSC has significant concerns with implementation of the Final Rule that

cannot be overstated. The Final Rule will likely have lasting and severe impacts with no

discernable benefit. If the Final Rule is not stayed while the legal challenges against it

proceed, there will foreseeably be serious and irreparable harm to the State and people of

North Dakota. North Dakota power plants will likely be forced to retire, North Dakota

ratepayers will pay more for electricity, and the reliability of the grids servicing North

Dakota will be significantly threatened.

38.

NDPSC strongly encourages the Court to stay implementation of the Final Rule.

States from encouraging production of new or clean generation through measures "untethered to a generator's

wholesale market participation." ... So long as a State does not condition payment of funds on capacity clearing the

auction, the State's program would not suffer from the fatal defect that renders Maryland's program unacceptable.").

16 See, e.g., Hughes, 578 U.S. at 166; accord, e.g., PPL EnergyPlus, LLC v. Solomon, 766 F.3d 241, 255 (3d Cir.

2014) ("The states may select the type of generation to be built—wind or solar, gas or coal—and where to build the

facility[,] [o]r states may elect to build no electric generation facilities at all."); PPL EnergyPlus, LLC v. Nazarian,

753 F.3d 467, 478-80 (2014); N.J. Bd. of Pub. Utils. v. FERC, 744 F.3d 74, 97 (3d Cir. 2014)

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Executed in Bismarck, North Dakota, on May 28, 2024.

J i 1 FedorchakV

missioner

orth Dakota Public Service Commission

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