Power Move: Applying FERC Orders 841 and 2222 to Mitigate Use of Peaker Plants in Environmental Justice Communities

Power Move: Applying FERC Orders 841 and 2222 to Mitigate Use of Peaker Plants in Environmental Justice Communities

Mary Franco

Time and again marginalized neighborhoods, often communities of color or low-income communities, bear the brunt of local pollution due to historic placement of high-polluting power plants.[1] In particular, fossil fuel peaker plants expose nearby low-income and minority communities, or environmental justice (EJ) communities, to disproportionate amounts of particulate matter, nitrogen oxides, and sulfur dioxide.[2] Grid operators typically employ peaker plants when there is high demand on the electric grid, usually in extremely hot or cold temperatures. These plants need to ramp up quickly and use single-cycle operation, making them more inefficient than their baseload generation counterparts.[3] Currently, the United States has over 1,000 peaker plants.[4] Nearby neighborhoods suffer disproportionate health disparities linked to heavy air pollution from this fossil-fuel energy infrastructure, particularly on hot summer days when local pollution impacts can be more significant.[5]

Traditionally, energy planning in the United States is designed to accommodate large fossil fuel plants. High polluting peaker plants are an extension of this general framework. As the United States takes steps to combat greenhouse gas emissions and climate change, wind and solar farms enter the marketplace in unprecedented quantities.[6] Despite this influx of renewable generation, distributed energy resources (DER) and electric storage resources (ESR) have yet to flood the marketplace in the same way.[7] The Federal Energy Regulatory Commission (FERC) defines an ESR as “a resource capable of receiving electric energy from the grid and storing it for later injection of electricity back to the grid.”[8] Along with electric battery storage, DER include technologies like rooftop solar, electric vehicles, and electric vehicle charging equipment.[9]

These technologies operate on a much smaller scale than traditional energy plants, but still have the potential to offer substantial grid benefits, such as adding reliability through both distributed supply and demand reduction.[10] In addition to offering reliability benefits, these technologies have the potential to alleviate air pollution burdens on EJ communities. EJ lawyers may seek an injunction or pollution cap on high polluting fossil fuel plants,[11] but DER and ESR offer more permanent solutions—these resources have the potential to replace the energy supply from high-carbon peaker plants in EJ communities.

Within the past five years, FERC has promulgated several rules to bolster electric battery storage and DER in the interstate marketplace. Acting under the authority of the Federal Power Act (FPA), FERC operates within a cooperative federalism scheme whereby FERC regulates interstate wholesale markets, and the states are left to regulate intrastate retail markets.[12] This structure, originally developed with centralized fossil fuel plants in mind, invites litigation to resolve jurisdictional disputes driven by competing interests.[13] FERC authority has withstood judicial scrutiny on several occasions.[14] In 2018, FERC promulgated Order 841, which prevents states from “broadly prohibiting” ESR access to the grid.[15] Utilities challenged Order 841 in Nat’l Ass’n of Regulatory Util. Commissioners v. Fed. Energy Regulatory Comm’n (NARUC), but the D.C. Circuit Court upheld the Final Rule.[16] This victory solidifies Order 841 as a strong potential tool to combat the electrical grid’s dependence on peaker plants.

Months after Rule 841 survived the utilities’ legal challenge at the D.C. Circuit Court, FERC promulgated Order 2222, a more aggressive rule aimed at removing barriers for distributed energy resources, like rooftop solar and electric vehicle infrastructure, from entering the grid.[17] Order 2222 offers a further tool to combat disproportional pollution in EJ communities as it lays the groundwork for these distributed technologies to enter the grid in aggregation.

            This Note discusses how implementation of FERC orders 841 and 2222 can serve EJ communities by alleviating disproportionate pollution associated with fossil-fuel generation. With more battery storage and distributed resources, states can alleviate two major issues with the clean energy transition: (1) providing equitable access to clean energy and (2) curbing disproportionate negative effects on vulnerable communities. Part I of this Note explores how fossil fuel plants pose significant EJ issues and discuss the limitations of litigation strategies to combat these problems. Next, Part II navigates legal and nonlegal ESR and DER barriers to explain why they have yet to populate the market. Then Part III analyzes Orders 841 and 2222, how they address these barriers, and explains the caselaw providing the foundation to FERC’s rules. Lastly, Part IV highlights a case study, Sunset Park Solar, which demonstrates how these technologies can serve EJ communities.

[1] See Helen H. Kang, Pursuing Environmental Justice: Obstacles and Opportunities—Lessons from the Field, 31

Wash. U. J. L. & Pol’y 121, 123–25 (2009) (describing attributes of environmental justice communities as communities of color living near power plants).

[2] Peak Coalition, Dirty Energy, Big Money: How Private Companies Make Billions from Polluting Fossil Fuel Peaker Power Plants in New York City’s Environmental Justice Communities – and How to Create a Cleaner, More Just Alternative (2020), https://www.cleanegroup.org/wp-content/uploads/Dirty-Energy-Big-Money.pdf.

[3] Id.

[4] Peaker Plant Map, Clean Energy Group, https://www.cleanegroup.org/ceg-projects/phase-out-peakers/peaker-plant-map/ (last visited July 25, 2021).

[5] Peak Coalition, supra note 2.

[6] U.S. Energy Information Administration Office of Energy Analysis, Annual Energy Outlook 2020, U.S. Energy Info. Admin. (Jan. 29, 2020), https://www.eia.gov/outlooks/aeo/pdf/AEO2020%20Full%20Report.pdf.

[7] Advanced Energy Economy, Wholesale Market Barriers to Advanced Energy – and How to Remove Them, AEE (May 2019), https://rtoinsider.com/wp-content/uploads/Wholesale-Market-Barriers_FINAL-1.pdf.

[8] 18 C.F.R. § 35.28(b)(9) (2018).

[9] FERC, Docket No. AD18-10-000, Distributed Energy Resources Technical Considerations for the Bulk Power System (2018), https://cms.ferc.gov/sites/default/files/2020-05/der-report_0.pdf.

[10] Amy L. Stein, Reconsidering Regulatory Uncertainty: Making a Case for Energy Storage, 41 Fla. St. U. L. Rev. 697, 703 (2014) (“These reliability benefits can come in the form of backup electricity in times of power outages, enhanced power quality to prevent outages, and frequency regulation that adjusts for differences between grid operators’ predictions and actual demand.”).

[11] See City of New York v. BP PLC, 325 F. Supp. 3d 466 (S.D.N.Y. 2018).

[12] 16 U.S.C. § 824(b)(1).

[13] See Joel B. Eisen, FERC’s Expansive Authority to Transform the Electric Grid, 49 U.C. Davis L. Rev. 1783 (2016).

[14] See e.g., FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760 (2016) [hereinafter EPSA]; Hughes v. Talen Energy Mktg., LLC, 136 S. Ct. 1288 (2016).

[15] Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators, Order No. 841, 162 FERC ¶ 61,127 (2018) [hereinafter Order No. 841].

[16] Nat’l Ass’n of Regul. Util. Comm’rs v. FERC, 964 F.3d 1177 (D.C. Cir. 2020).

[17] FERC Opens Wholesale Markets to Distributed Resources: Landmark Action Breaks Down Barriers to Emerging Technologies, Boosts Competition, FERC News Release (Sept. 17, 2020), https://www.ferc.gov/news-events/news/ferc-opens-wholesale-markets-distributed-resources-landmark-action-breaks-down.


Submissions The Vermont Law Review continually seeks articles, commentaries, essays, and book reviews on any subject concerning recent developments in state, federal, Native American, or international law.

Learn more about the submissions process >