FERC’s aid to DOE on grid threats: Too far or just right?

Source: Peter Behr, Sam Mintz and Rod Kuckro, E&E News reporters • Posted: Wednesday, August 15, 2018

Energy Secretary Rick Perry’s controversial campaign to support at-risk coal and nuclear plants has pulled the independent Federal Energy Regulatory Commission into a policy snarl over whether its staff has compromised its neutrality to support the Trump administration’s policy goals on safeguarding the nation’s power grids.

Perry’s staff is trying to pinpoint a number of coal and nuclear plants that should be kept open with federal subsidies. He argues that their premature retirement would jeopardize the nation’s power supply if an extreme natural disaster or severe cyber or physical attack occurred.

FERC Chief of Staff Anthony Pugliese told an industry group this month that the commission staff was aiding the Energy Department’s effort, and his remarks became public last week.

FERC has declined to say what instruction the staff received on the project from FERC Chairman Kevin McIntyre. One commissioner, Neil Chatterjee, told E&E News last week he had been unaware of the effort but was not surprised that FERC was aiding DOE. “We’re the reliability experts,” he said. “I would hope that other agencies would defer to our expertise when it comes to the reliability of the grid.”

But other energy industry leaders not in the coal and nuclear camp said FERC staff could be going too far in advising DOE while the commission is still weighing its future policy on protecting the nation’s power networks from the gravest hazards. DOE’s proposal to aid coal and nuclear plants would come at the expense of competing power generation.

“I completely understand the concern about the independence of the commission,” said James Hoecker, a former FERC chairman who now heads an organization campaigning for a stronger high-voltage transmission network. “It’s not an arm of the administration and has to be very careful not to appear to be that. Appearances are important.”

Rob Gramlich, president of Grid Strategies LLC and a former FERC official, said: “In FERC proceedings, DOE is an interested party like any other, no more and no less. The commission has a proceeding to define resilience, among other things, which they have not finalized. Whether individual power plants are essential for reliability or resilience is an open issue in that proceeding.”

The issue broke out last week with the publication of remarks by Pugliese to a nuclear power group. “We are working with [the Department of Defense] and DOE and [the National Security Council] to identify the [coal and nuclear] plants that we think would be absolutely critical to ensuring that not only our military bases but things like hospitals and other critical infrastructure are able to be maintained, regardless of what natural or man-made disasters might occur,” Pugliese said in a recording of his remarks to the American Nuclear Society, shared with E&E News by Rod Adams of Atomic Insights (Energywire, Aug. 9).

FERC spokesman Craig Cano said the staff’s work in this case was routine. “FERC is an independent agency and therefore has not assisted in the development of policy but provides technical assistance as subject matter experts,” he said.

Just how FERC’s expertise on grid security would help DOE in that wasn’t clear, according to some experts.

FERC’s Office of Energy Infrastructure Security, headed by Joseph McClelland, has made deep studies of power grid vulnerabilities and potential targets, sharing these with electric power companies. FERC’s jurisdiction, however, centers on defending high-voltage power lines and substations, not particular power plants, some experts said.

Speaking of Pugliese’s description of FERC’s work, former FERC Commissioner Nora Brownell said, “It seems either it is inaccurately portrayed or it represents a real problem in terms of the independence of the FERC. It is really unfortunate.”

Brownell pointed to the bulging docket of comments from across the power sector that were filed in response to FERC’s requests for comments on grid resilience at the beginning of the year. The arguments and evidence come from every side of the issue, and this is what has to guide the commission, she said.

Just the facts

If FERC’s staff is helping DOE build its case for coal and nuclear support, it’s going too far, she said. “You have to base your decision on a record of facts,” Brownell said. “One can differ about the facts, but not ignore them. It’s prejudging to come to a conclusion before you’ve had an opportunity to examine the full record. That’s what’s supposed to influence you, not politics.”

But former FERC Chairman Jon Wellinghoff said the work described by Pugliese and FERC sounded like typical collaboration between the agency and other bodies including DOE, the Council on Environmental Quality and the Interior Department.

He compared it to confidential “load flow studies” he called for as FERC chairman, which were designed to evaluate the most critical power substations in the U.S. That analysis, as reported in an explosive 2014 Wall Street Journal article, concluded that taking out as few as nine high-voltage substations could cause widespread power blackouts, a finding some experts challenged at the time.

“I assume it would be similar studies to see if certain power plants were taken out of the system, what the load flow results would be and how that would impact the interconnects that they were in and their resulting problems, if any,” Wellinghoff said in an interview.

He said that FERC has regularly worked with other agencies, always in a way that maintains its independence.

“We were looking at issues that are related to FERC’s primary mission or the mission of these other agencies. It was being done in a way to ensure that we had accurate data about how each agency would act independently on their authority to conduct policy,” Wellinghoff said.

“We have our Office of Energy Infrastructure Security here at FERC as well as the Office of Electric Reliability,” Chatterjee said in an interview, adding that FERC sits “at the table” with DOE, the Department of Homeland Security and the FBI in meetings of the Electricity Subsector Coordinating Council, the high-level industry and government committee on grid threats.

“That’s a regular part of our role. We are the reliability experts, and I think other agencies defer to our expertise,” he said.

Chatterjee said he could not speak to the “level of specificity” mentioned by Pugliese that FERC is helping to identify individual plants deemed critical to the grid.

The consumer advocacy group Public Citizen filed comments to FERC yesterday asking to explain the commission’s role.

“Mr. Pugliese’s statement reveals previously undisclosed details about Commission activity that raise significant concerns about the extent to which the agency is promoting radical new standards of reliability and generation attributes that may be used to justify consumer- or taxpayer-funded bailouts,” wrote the group’s energy director Tyson Slocum.

He said that although FERC claimed it is not helping the Trump administration develop policy, the agency’s provision of “technical assistance” to DOE “can reasonably be interpreted that the Commission is assisting with the implementation and promotion of policy.”

Slocum asked FERC to detail in a public filing “all activities, actions (including technical assistance) related to coordinating with the U.S. Department of Energy, the U.S. Department of Defense and the National Security Council around grid resilience.”