Former commissioners oppose DOE proposal

Source: Sam Mintz, E&E News reporter • Posted: Friday, October 20, 2017

Eight former members of the Federal Energy Regulatory Commission said yesterday that the agency should not follow through with a Department of Energy proposal to compensate coal and nuclear plants.

The bipartisan group, which includes five former chairmen from both parties, wrote in comments on the official docket for the proposed rule.

They say it would be “a significant step backward from the Commission’s long and bipartisan evolution to transparent, open, competitive wholesale markets.”

The proposal would pay coal and nuclear plant operators for maintaining a stockpile of 90 days of fuel at their facilities, which Energy Secretary Rick Perry says is necessary to avoid continuing plant retirements and therefore ensure grid resilience.

But the proposition has been attacked from many fronts, and from both ends of the political spectrum (Greenwire, Oct. 17).

“Pursuing the worthy goal of a resilient power system, the Commission’s adoption of the published proposal would instead disrupt decades of substantial investment made in the modern electric power system, raise costs for customers, and do so in a manner directly counter to the Commission’s long experience,” wrote the former FERC leaders.

They include Elizabeth Moler, James Hoecker, Donald Santa, Linda Breathitt, Nora Brownell, Pat Wood, Joseph Kelliher and Jon Wellinghoff.

Rescuing specific energy sources to avoid retirements would “fundamentally distort markets,” said the comments. “The subsidized resources would inevitably drive out the unsubsidized resources, and the subsidies would inevitably raise prices to consumers.”

They added, “Investor confidence would evaporate and markets would tend to collapse. This loss of faith in markets would thereby undermine reliability.”

FERC Chairman Neil Chatterjee said after this morning’s public meeting that he had not seen the comments yet, but that the agency values all the input it receives.

“Folks with that level of expertise, we’ll carefully look at what they say. I understand there are concerns,” he said.

“The fact that concerns are being raised by some of those … chairmen, we’re certainly going to go back to that,” said the former Senate aide. “I’m certain there will be comments from others strongly in favor of what DOE has put out.”

Earlier in the meeting, FERC staff said they were not expecting major risks to the electric grid this winter, a fact that challenges the premise for a rushed timeline on the DOE idea (Greenwire, Oct. 19).

Former DOE official weighs in, too

In another notable comment on the proposal today, a former head of DOE’s Office of Fossil Energy under President Obama, Charles McConnell, wrote in favor of finalizing the rule.

McConnell, a coal booster, has been critical of his former boss’s policies since leaving DOE in 2013. He now leads the Energy and Environment Initiative at Rice University.

“Coal and nuclear generation plants provide grid resiliency through on-site and secure fuel supplies that cannot be matched by any other major generation sources. Notwithstanding the essential nature of this reliability feature, coal and nuclear plants have been retiring prematurely at an alarming rate,” wrote McConnell.

He wrote that reliability was “purposely disregarded” by federal agencies during his time at DOE, and that the Obama administration largely developed energy policies through U.S. EPA, echoing other coal backers.

“I have been watching for some time now as the country has been veering toward increased risk of disaster — subordinating the priority of reliable, resilient electric service, which is critical to the public health and welfare, to an anti-industry environmental agenda,” wrote McConnell.

“We are at a crisis point. We can’t predict when a sudden circumstance will test our ability to adapt, but we can act now to strengthen the ability of the electric grid to adapt and recover rapidly in such an event. The public health depends on it. I encourage the Commission to finalize the [notice of proposed rulemaking],” he concluded.