FERC Republican warns against ‘ganging up’ on grid operator

Source: Sam Mintz, E&E News reporter • Posted: Thursday, June 28, 2018

As the Federal Energy Regulatory Commission waits for possible new action from the Department of Energy aimed at rescuing struggling coal and nuclear plants, one FERC member today warned the Trump administration not to target a specific region of the country.

Republican Commissioner Robert Powelson, a former Pennsylvania state regulator, told reporters that he is “deeply concerned” that DOE is focused specifically on PJM Interconnection, the electric grid operator that operates in the Mid-Atlantic and eastern Great Lakes region.

“If you want to be thoughtful, intellectually honest, and look at things like just and reasonableness and look at the engineering, then this has to be a broader conversation and it has to look at all parts of the country,” Powelson said on the sidelines of the World Gas Conference.

The plans under consideration at DOE, which were revealed in a leaked memo earlier this month, call for employing rarely used authorities under the Federal Power Act and Defense Production Act to declare a grid emergency and order grid operators to pay coal and nuclear plants to keep running (Greenwire, June 1).

The implementation of the plan as described in the memo, which involves designating a list of threatened power plants that it argues are necessary to maintain grid resilience, would theoretically affect different parts of the country. But PJM is home to many plants that are struggling, including several in Ohio and Pennsylvania owned by FirstEnergy Solutions Corp., which has heavily lobbied the Trump administration for policy support.

Powelson said he is waiting along with the rest of FERC to see what specific policies DOE might produce but noted that DOE’s proposal does not necessarily address problems like natural gas constraints in New England, concerns with gas storage in California and a “razor-thin” reserve margin in Texas during the summer.

“I wait to see what the DOE is going to put out. Is it going to be potentially looking at all parts of the country, or are we ganging up on PJM for no apparent reason?” he said.

The rhetoric echoes his opposition to a prior DOE plan that was ultimately rejected at FERC and would have similarly made payments to coal and nuclear plants in certain markets. Powelson said at the time that he didn’t join FERC to “blow up the markets.”

The FERC commissioner said that he has not had any conversations with DOE about the plans and that FERC is continuing to do the “boring good.”

“Looking at reliability metrics, working closely with [regional transmission organizations] and [independent system operators] to address the ever-changing fuel mix. Dealing with cybersecurity, not politicizing cybersecurity. That’s what we’re focused on,” he said.

The justification for the draft plan in the DOE memo describes natural gas pipelines as being “increasingly vulnerable to cyber- and physical attacks.”

Powelson’s colleagues at FERC have had mixed reactions to the plan. Democrats Richard Glick and Cheryl LaFleur have stated outright they do not believe there is a national security emergency.

“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 haven’t been able to achieve otherwise,” Glick said at a congressional hearing earlier this month.

Their Republican colleagues have taken a cautious, wait-and-see approach.

“Until I have something concrete in front of me, I can’t really be prepared to formulate a view on it,” Chairman Kevin McIntyre said at a news conference last week.

He had previously said it’s possible FERC could play a role in DOE action, essentially setting rates between grid operators and generation companies, if DOE employs its emergency authority under the Federal Power Act.

The third FERC Republican, Neil Chatterjee, said yesterday that the situation is “purely speculative at this point.”

“People keep asking what FERC’s role would be, and it’s totally dependent on what the mechanism is,” Chatterjee told E&E News.