DOE official ties resilience proposal to national security

Source: Rod Kuckro, E&E News reporter • Posted: Friday, November 3, 2017

Saying the Department of Energy is “delighted” with the interest shown in its proposal to rescue some coal and nuclear plants unable to compete in the market, a senior Trump appointee yesterday said national security considerations demand action by federal regulators.

“National security is a winner, no matter how you want to argue about it. And we are picking that,” said Sean Cunningham, executive director of DOE’s Office of Energy Policy and Systems Analysis.

In late September, Energy Secretary Rick Perry directed the Federal Energy Regulatory Commission to consider within 60 days a notice of proposed rulemaking aimed at ensuring resilience on the grid by propping up baseload coal and nuclear units with cash subsidies if needed.

“There’s wide agreement that the problem is real and it requires prompt FERC action,” he said.

FERC received more than 500 comments on the proposed DOE rule by an Oct. 23 deadline. Reply comments are due Nov. 7, and FERC has said it would act on the DOE request by Dec. 11.

Cunningham was responding to how at a House hearing in early October, Perry tied higher consumer prices associated with the NOPR to “the cost of freedom” (E&E Daily, Oct. 13).

“We have not produced a cost estimate on freedom,” he said, adding that “I think the point that the secretary was making there was pretty obvious.”

Cunningham was a late addition to a panel discussion of stakeholders on the grid rule in Washington sponsored by the Bipartisan Policy Center.

“I’ve wondered what it might be like walking barefoot through broken glass,” he quipped after being introduced by BPC President Jason Grumet.

“The war on coal is over,” and that applies to nuclear as well, Cunningham told the standing-room-only audience at the BPC event.

Returning often to the concept of grid resilience — of which there is no agreed definition in the electricity industry — Cunningham said both coal and nuclear are “fuel-secure generation.”

“There’s a lot of evidence in the record that shows it is important to have fuel storage to help the grid bounce back in the event of major fuel disruptions to other fuels,” especially when national security is at issue, he said.

Cunningham made clear he does not necessarily subscribe to the notion that potential subsidies to coal and nuclear plants would outweigh the costs to consumers if FERC takes no action.

“The secretary looks at these issues in the big picture. We have to consider what the costs implications will be to consumers if coal and nuclear resources were removed from the mix. The implications for consumers are going to be much higher prices,” he said.

A goal of the NOPR is that “we really want to emphasize the issue of nuclear power, and this is something I didn’t understand or appreciate before I joined the staff of the DOE,” Cunningham said.

“It’s something that we have to take seriously. Do we want to live in a world without nuclear power? There are some people who want that. But at DOE, we do not want to live in a world without nuclear power, we do not want to cede the supply chain” for nuclear power components to countries that might be hostile, he said.

Cunningham, who helped write major portions of the Energy Policy Act of 2005 when he was counsel to the House Energy and Commerce Committee, since early September has been overseeing the agencywide policy shop that former Energy Secretary Ernest Moniz assembled to coordinate energy policy and perform detailed energy analysis.

Cunningham served on the Trump administration’s landing team.

He recently was a partner in the energy section at the law firm Balch & Bingham LLP, where he represented electric utilities on everything from transmission issues to renewable energy.