FERC member: We won’t ‘bastardize markets’

Source: Hannah Northey, E&E News reporter • Posted: Monday, October 16, 2017

A key member of the Federal Energy Regulatory Commission yesterday tried to calm jitters around an Energy Department directive that would bolster coal and nuclear plants.

Robert Powelson, a new FERC member from the gas-rich state of Pennsylvania, attempted to give attendees at an energy conference in Washington, D.C., “peace of mind your voices will be heard,” and said the commission isn’t in the practice of picking winners and losers in the energy markets.

“The moment we kind of put our thumb on the scales is the moment we bastardize markets,” Powelson told attendees at the American Association of Blacks in Energy event at the National Press Club. “That’s not our sweet spot.”

But Sen. Joe Manchin (D-W.Va.), whose state depends heavily on coal jobs, applauded the possible rule change on Monday.

“I encourage you to ensure that coal-fired and nuclear baseload units, which make our electric delivery system more resilient and provide essential reliability services, are appropriately valued and compensated for their beneficial attributes,” he said in a statement.

Powelson was seen meeting Energy Secretary Rick Perry in a photo he tweeted this morning during the D.C. event. The Energy Department chief also spoke to the group.

Powelson applauded Perry for telling Congress his request for a new rule was a “starting point” for broader conversation around baseload power and the value of flexible resources.

But he pushed back on any notion that the gas industry was to blame for outages that occurred during the polar vortex of 2014, an extended deep freeze that has played a central role in arguments on and off Capitol Hill regarding coal and nuclear plants.

Powelson said many lessons have been learned and safeguards have been put in place since the Northeast was plunged into record cold temperatures and wholesale prices spiked.

“There’s a dirty little secret going around that the gas guys didn’t perform during the Jan. 6 and 7 timeline,” Powelson said. “I’m here to tell you unequivocally that was not the case. I cannot stand here and represent a mistruth.”

Under the vision outlined in Perry’s request to DOE, coal and nuclear operators would receive market payments that “value” their on-site fuel supplies as insurance against extreme storms, natural disasters or attacks that disrupt pipeline supplies.

Absent from Perry’s proposal was any mention of the public value of carbon-free and less-polluting electricity supplied by renewable resources and nuclear power.

The proposal also drew attention at a recent clean energy conference in Las Vegas, where former Energy Secretary Ernest Moniz questioned his successor’s quest for new policy to bolster nuclear and coal power, saying warnings about reliability and resilience have yet to be proved.

Moniz, speaking at the National Clean Energy Summit at the Bellagio on Friday said he found Perry’s use of an authority that hasn’t been invoked for more than 30 years to request for a rule from FERC to be “surprising” and a “rather bold intervention in the market.”

When asked whether he would take the same action, Moniz cast Perry’s move as a departure from the Obama administration’s more collaborative approach with FERC.

Moniz said zero-carbon emissions and national security attributes tied to nuclear power may indeed need to potentially be incorporated into the market and rate structures. But he went on to question arguments underpinned with warnings about reliability and resilience.

“I have a harder time with coal; certainly the carbon part is not there, for sure,” Moniz said.

“Frankly, the reliability issues, most studies, including, I think, the technical study the DOE solicited earlier, do not suggest we have such reliability issues to drive that, so what’s left is the so-called resiliency issue of having a supply of on-site fuel,” he continued. “I think an analysis may indicate that that is not such important problem.”

A number of critics of Perry’s request have said the proposal contains no evidence of immediate dangers to the nation’s high-voltage grid from the retirements of marginal coal and nuclear plants (Energywire, Oct. 3).