Governors' Wind Energy Coalition

Federal Energy Regulatory Commissioner Robert Powelson spoke out yesterday about the Department of Energy’s proposal to change electricity market rules, strongly reaffirming FERC’s independent status and promising not to “blow up the markets.”

The Department of Energy issued a notice of proposed rulemaking last week, directing FERC to require electricity markets it oversees to aid coal and nuclear plants by allowing them to fully recover costs (Greenwire, Sept. 29).

FERC’s staff has said the agency is moving forward with the proposal and will take “appropriate action” within the 60-day time frame requested by DOE.

Powelson’s comments, made at a speech in Arlington, Va., yesterday and first reported by SNL, signal that the former Pennsylvania regulator is not prepared to directly adopt DOE’s proposal.

“We will not destroy the marketplace,” the Republican appointee said, according to SNL. “Markets have worked well and markets need to continue to work well.”

“I’ll give [DOE] Secretary Perry credit; he’s trying to be thoughtful in the approach, but there’s many different approaches on how we can tackle this issue,” said Powelson. “I did not sign up to go blow up the markets.”

The commissioner also told the audience that FERC, an independent and bipartisan body, “does not do politics. We don’t do energy politics.”

Commissioner Cheryl LaFleur, a Democratic appointee, later endorsed Powelson’s comments in a tweet. “Great message!” she wrote on Twitter.

While FERC Chairman Neil Chatterjee’s past statements have lined up more closely with the DOE proposal — he has said he thinks coal and nuclear plants need to be properly compensated — the chairman has not yet spoken publicly about Secretary Rick Perry’s rule.

Also yesterday, FERC filed a request for information in its docket for the rulemaking.

It asked people to weigh in on more than 50 questions, including DOE’s provision that plants eligible for the compensation must have 90 days of fuel available on-site.

Rule could cost consumers billions

A group of consumer advocates testifying before a House committee this morning told lawmakers the DOE proposal is not in the best interests of energy consumers and could raise costs dramatically.

“The federal government should not be in the position to pick the winners and losers in the power industry as DOE is proposing,” said John Hughes, CEO of the Electricity Consumers Resource Council.

“DOE is saying manufacturing jobs are not as important as the jobs at economically obsolete coal-fired and nuclear power plants — plants for which the market has already provided much more economic alternatives,” Hughes said.

Analysts’ estimates for the proposal have said it could cost consumers anywhere from $800 million to nearly $4 billion a year.

Tyson Slocum, who heads the Energy Program at Public Citizen, said that the DOE rule “reads more like a President Trump tweet than a reasoned, serious policy proposal” and that the retirements of coal and nuclear plants are not a crisis.

“The owners of these plants may consider it a crisis that they’re not making the money they promised to their shareholders, but that is of no concern to consumers or to FERC’s mandate that rates be just and reasonable,” he said.