Reliable Power Act Gives Energy Regulators Veto Power Over Federal Agency Rules During Grid Shortages

The Reliable Power Act, specifically Section 2, sets up a new system for checking the grid’s health and gives the Federal Energy Regulatory Commission (FERC) significant new authority over other federal agencies, like the Environmental Protection Agency (EPA).

The Grid’s Annual Check-Up

First, this bill mandates that the Electric Reliability Organization (ERO)—the folks who watch over the national power grid—must start doing an annual, long-term assessment of the bulk-power system. Think of this as a mandatory annual physical for the grid. The ERO has to analyze whether there will be enough electric generation capacity to meet demand, especially during extreme weather events. They need to look at everything from the mix of power plants currently running to where new transmission lines are being built (Section 2).

If the ERO’s assessment determines there’s a risk of future electric energy shortfalls—meaning the grid might not have enough juice to keep the lights on reliably—they must publicly declare a “state of generation inadequacy” and notify FERC. This is the trigger that sets the whole new regulatory process in motion. For regular folks, this is the good news part: the system gets a required early warning signal about potential blackouts before they happen.

FERC’s New Review Power

Here’s where things get interesting, and potentially complicated. Once FERC receives that “inadequacy” notice, they have to inform other cabinet-level federal agencies. Any federal agency that receives this notice must then submit any “covered agency action” to FERC for review and comment. A “covered agency action” is defined broadly as any regulation that relates to, or directly affects, any generation resource in the bulk-power system that is currently under development or consideration.

Picture this: the EPA is working on a new rule about emissions from coal plants. If the ERO declares a generation inadequacy, the EPA must hand that rule over to FERC. FERC, in consultation with the ERO, will then issue comments and recommendations, potentially suggesting modifications to the EPA rule if they think it will hurt the grid’s ability to supply reliable power. The bill specifically allows FERC to recommend modifications to prevent a “significant negative impact” on reliability (Section 2).

The Veto Effect

This is the biggest change: A federal agency head cannot finalize their rule until two conditions are met. First, they must respond in writing to FERC, explaining how they modified the rule or why they didn't. Second, and most critically, FERC must determine that the finalized rule is not likely to have a significant negative impact on the bulk-power system's ability to supply sufficient electric energy for adequate reliability. Essentially, if FERC decides the EPA’s rule (or any other agency’s rule affecting power generation) poses a threat to grid reliability, they can effectively block it from being finalized.

For those of us juggling rising utility bills and maybe dealing with extreme weather events, the idea of prioritizing grid reliability sounds great. However, this process gives FERC and the ERO—bodies primarily focused on energy supply and infrastructure—a powerful check on the rulemaking authority of agencies focused on other mandates, like environmental protection or safety. It creates a new hurdle for any regulation that touches power generation, potentially slowing down or stopping rules that might improve air quality or reduce long-term climate risks, simply because they might require older, less reliable plants to shut down or upgrade. It’s a major concentration of power over federal regulatory policy that could significantly impact how quickly—or slowly—we transition our energy infrastructure.