U.S. Electricity Commission Sees No Emergency in Power Market

Source: By Timothy Gardner, Reuters • Posted: Wednesday, June 13, 2018

WASHINGTON — All five members of the panel that regulates the U.S. power grid indicated at a Senate hearing on Tuesday there was no emergency in the country’s electricity markets, potentially undermining efforts by President Donald Trump’s administration to save ailing coal and nuclear plants through subsidies.

Trump this month directed U.S. Energy Secretary Rick Perry to take emergency measures to keep coal and nuclear plants running in order to protect national security.

Many of the plants have shut in the face of plentiful natural gas, growth in wind and solar power, and stagnant power demand. More closures are expected in coming years.

Kevin McIntyre, the chairman of the Federal Energy Regulatory Commission (FERC) and one of three Republicans on the five member panel, said there was “no immediate calamity or threat” to power plants operating or serving the needs of consumers.

Senator Martin Heinrich, a Democrat, later asked all members of the FERC at the Senate energy committee hearing whether any of them saw a national security emergency in power markets. Cheryl LaFleur, a Democrat, said she did not, and the other four members responded to the question with silence.

Neil Chatterjee, another FERC Republican, cautioned that even though the power grid is reliable, regulators need to be vigilant that the turn away from coal and nuclear to natural gas does not make the grid less able to bounce back from weather disasters and physical and cyber attacks on the infrastructure.

But Robert Powelson, a Republican member of the commission said a directive to the Energy Department to subsidize coal and nuclear could result in “significant rate increases without any corresponding reliability, resilience or cyber security benefits.” He said intervention threatens “to collapse the wholesale competitive markets that have long been a cornerstone of FERC policy.”

Richard Glick, a Democrat on the FERC, said Trump’s push to save aging coal and nuclear plants would “clearly” raise power bills for residents and businesses. “The question is how much,” he said. Glick said estimates he had seen showed the country’s utility rates could rise tens of billions of dollars.

Chatterjee, from coal-producing Kentucky, commiserated with Senator Steve Daines of Montana about how the loss of coal plants means job cuts at power generators and mines.

But he suggested that lawmakers may have to legislate changes to help save those jobs. “That is not something we factor into our record,” Chatterjee said about the deliberations of FERC, which ensures that power markets run efficiently.

(Reporting by Timothy Gardner; Editing by Chris Reese)