Perry throws cold water on declaring grid emergency

Source: Saqib Rahim, E&E News reporter • Posted: Tuesday, April 10, 2018

NEW YORK — Energy Secretary Rick Perry hedged today as to how the administration will act on an Ohio energy company’s mayday call for its coal and nuclear plants.

FirstEnergy Solutions Corp., the competitive-generation arm of FirstEnergy Corp., filed for bankruptcy late last month. It has told the Department of Energy that the closure of these plants would amount to a grid emergency and that DOE should use its authority under Section 202(c) of the Federal Power Act to keep them online (E&E News PM, April 5).

Perry said DOE’s review is ongoing.

“The 202(c) may not be the way that we decide that is the most appropriate, the most efficient way to address this,” Perry said at the Bloomberg New Energy Finance summit here. “It is not the only way.”

Asked for his definition of “emergency,” Perry responded, “When you flip the light switch on and nothing happens.”

Last year, speaking at the same conference, Perry called for a potentially expanded use of 202(c) as a tool to support coal and nuclear plants nationwide.

Since then, coal industry leaders such as Murray Energy Corp. have asked the Trump administration to use it on behalf of plants that they say are at imminent risk of closure without some form of policy support (Energywire, Aug. 23, 2017).

But according to legal experts, the language of 202(c) doesn’t have a lot of legal flexibility, because the definition of “emergency” has been hard to expand. FirstEnergy Solutions is the latest to try.

Perry maintained that finding some way to keep nuclear, and coal, in the power mix is a matter of national security. He said the U.S. has become the world’s top oil producer, a major natural gas exporter that’s competing with Russia abroad and a country with growing coal exports, even as renewable energy grows and carbon emissions fall.

At the same time, he said, shortsighted U.S. policy decisions have left the power grid vulnerable enough that he can imagine scenarios — serious storms or cyberattacks — where someone flips the switch and nothing happens. He said that could happen at a military base or at the New York Stock Exchange.

Relying only on free-market principles to maintain grid security, said Perry, is wrongheaded.

“We don’t have a free market in that industry, and I’m not sure you want one,” he said. “We believe that we’ve got to spend some money to guarantee the freedom and security of this country. And I happen to think that power is part of that. Without power, this country has no national security.”

Perry seemed to be less concerned about the prospects for global trade. The secretary touted American exports of gas and coal and the foreign policy leverage that it gives the U.S. and its allies. He skirted a question about whether the U.S. could end up in a trade war with China.

But he reaffirmed Mexico and Canada as “very important trading partners,” even if he thought the North American Free Trade Agreement could use an update.

“Now, after 25 years, is it time to renegotiate a deal? Absolutely,” he said. “We’re going to trade; the question’s going to be: What are those trade agreements going to look like?”