FERC members throw cold water on plan to save coal, nuclear

Source: Hannah Northey, E&E News reporter • Posted: Wednesday, June 13, 2018

The federal government’s grid overseers today undercut the Trump administration’s assertion that a grid emergency is brewing and that ailing coal and nuclear plants need a direct lifeline.

The Senate Energy and Natural Resources Committee this morning peppered the five-member Federal Energy Regulatory Commission for more than two hours with questions about the need for federal intervention to secure the grid as reactors and coal plants close.

“Do any of you believe that in the wholesale power markets we’re facing an actual national security emergency?” asked Democratic Sen. Martin Heinrich of New Mexico.

FERC Commissioner Cheryl LaFleur, a Democrat, said, “I do not, senator,” prompting Heinrich to ask other commissioners if they would answer that question with a “yes.”

After a moment of silence, Heinrich replied, “Let’s move on, then.”

FERC Chairman Kevin McIntyre, a Republican and Trump appointee, separately told the Energy panel chairwoman, Republican Sen. Lisa Murkowski of Alaska, that there is “no immediate calamity or threat” to the bulk power system when asked if retirements have affected the quality of electricity services.

The hearing — marking the first appearance of all five current FERC commissioners before senators — focused largely on President Trump’s directive for Energy Secretary Rick Perry to halt the closure of nuclear and coal plants.

The National Security Council is reportedly considering a DOE proposal that hinges on the Federal Power Act and the Defense Production Act to direct grid operators to buy power from a list of struggling or closing facilities in the name of national security.

The leaked DOE proposal cites the heightened threat of cyberattacks to natural gas infrastructure and natural disasters (Greenwire, June 1).

The administration has said the closure of coal and nuclear plants could leave the grid vulnerable and overreliant on a rush of natural gas as intermittent renewables proliferate.

FERC last year rejected DOE’s proposal to subsidize coal and nuclear plants for their on-site fuel.

Republicans senators today openly fretted about whether regulatory action could be taken before coal and nuclear plants across the United States closed, while Democrats said the leaked DOE proposal is unnecessary and could cost taxpayers billions of dollars.

Commissioners, who said they had not seen the DOE proposal, said grid reliability has been continually protected, while calling for vigilance.

Commissioner Robert Powelson, a Republican and former commissioner from gas-rich Pennsylvania, said the nation will indeed need a variety of resources, but FERC shouldn’t be put in the position of creating “moral hazards” in markets that are working “hyper-efficiently.”

Powelson, noting that the commission is tackling resilience questions the administration has raised, said a hard and fast federal rule could “evaporate all the goodwill consumers have seen” and possibly leave some assets stranded.

Commissioners also pointed out that grid operators like PJM Interconnection and companies like Exelon Corp. have said there’s no grid emergency and pushed back on the DOE proposal.

Commissioner Richard Glick, a Democrat, said he sympathizes with those affected by the closure of nuclear and coal plants, but the government cannot stop the natural evolution of the renewable industry by claiming there’s an emergency unless evidence exists.

“We need to keep on being vigilant and monitoring the situation, but we also need to be wary of people using the situation or the potential situation as an excuse to achieve market changes they have been able to achieve otherwise,” said Glick.

Murkowski said she would favor a market solution, and that she hoped FERC would consider any tariff adjustments to address “legitimate” reliability concerns that Perry claims are continuing to mount.

Washington Sen. Maria Cantwell, the panel’s top Democrat, was more blunt, calling the Trump administration’s efforts a “head-scratcher,” given that the markets have been efficient.

She also said she’s aware of where cyberattacks on the energy sector originate, and that all power sources — not just natural gas pipelines — are vulnerable to attacks.

“I just find this whole thing almost mind-boggling,” Cantwell said.