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RAGE AGAINST THE FERC: The Trump administration is getting slammed by all corners of the energy industry over two proposals that could upset the last two decades of electricity regulation to benefit nuclear and coal power plants.
An unlikely group of bedfellows, the oil and renewable energy industries, joined forces Monday to poke holes in Energy Secretary Rick Perry’s Friday proposal to prop up coal and nuclear plants by compensating them to keep the lights on round the clock.
Unlikely bedfellows: The industry coalition says FERC could be violating the law if the commission enacts the proposed price changes. The group also says the number of days Perry wants to give industry groups to provide recommendations is wholly inadequate.
FERC’s surprise move: Just as the industries filed their complaints, FERC issued a notice stating that it is shaving the time groups have to respond to Perry’s proposal from 45 days to just 21 days, which sparked outrage overnight.
Tuesday morning battle plans: John Shelk, president of the Electric Power Supply Association, representing merchant utilities in Monday’s motion to FERC, wrote in an early morning email: “ … just as we made the filing FERC went the other way on timing for comments.”
Good news, bad news: “While it appears that, as our coalition requested, FERC did not issue an interim final rule (so good news there), instead of a longer comment period FERC actually set even a shorter one than DOE requested! Recall DOE had asked for 45 days and we asked for 90 days - FERC set 21 days so comments are now due Oct. 23 and reply comments Nov. 7.”
Inside baseball? “While this sounds like so much inside baseball, the stakes are enormous as you can imagine,” Shelk said. The changes to the market that Perry is proposing would represent a radical shift in how the markets that FERC operates function. The market would move from not picking winners and losers, to doing just that, according to the coalition.
Piles of coal: Shelk in an email to the Washington Examiner said the utilities he represents “welcome” Perry “pushing FERC to take more steps to improve the status quo.” But, “and this is the critical point, pricing reforms have to take into account how ALL power plants contribute to reliability and resilience, not just those plants with 90-days of on-site fuel.”
Perry says coal plants, because they can store big piles of coal on site, deserve special treatment.
“If FERC only addresses that narrower subset of plants, and not the rest, wholesale markets will become less reliable and resilient, not more so,” Shelk said. He noted that his group’s membership may have “more gas-fired plants than other fuels,” but it also has “lots of coal, renewables and some nuclear, too.”
HOUSE LOOKS FOR BETTER GRID PLANNING: The House Science, Space and Technology is looking Tuesday morning at how states are making the grid more resilient.
The hearing did not look at FERC or Perry’s grid plan. The hearing was meant to highlight lessons learned from states on how to build out a resilient grid, specifically grid planning in Chairman Rep. Lamar Smith’s home state of Texas, especially in the wake of Hurricane Harvey, according to aides. See the testimony from the hearing here.
“Instead of simply focusing on threats, we should prioritize improving the resilience of our electric grid,” Smith said at the hearing. “The resiliency of the grid is the ability of system operators to prevent disruptions in power, limit the duration of a power disruption, and quickly repair potential damage.”
Harvey’s rodeo: Walt Baum from the Texas Public Power Association told the committee that Harvey wasn’t Texas’ “first rodeo,” although the storm was challenging to grid reliability and resiliency.
Climate change: Climate change needs to be “part of the conversation” for grid resiliency, said Gavin Dillingham, program director at the Clean Energy Policy, Houston Advanced Research Center.
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CONSERVATIVE GROUP ALSO BLASTS PERRY PROPOSAL TO BOOST COAL: Perry’s surprise move Friday to ask FERC to help coal and nuclear power plants drew criticism from the conservative Texas Policy Foundation, a major think tank in Perry’s home state.
‘Corporate welfare’: Bill Peacock, the vice president of research for the foundation, called Perry’s proposal “corporate welfare” that contradicts conservative free-market principles. “The DOE rule is just another example of corporate welfare,” Peacock told the Washington Examiner.
What Perry wants: Perry asked FERC to create regulations that change regional power market pricing to compensate the "reliability and resilience attributes" of plants with 90 days of on-site fuel supply, which many took to mean nuclear, coal and hydropower. Typically, the energy secretary doesn't send proposed rules to FERC. And in this case, the commission already is working on price formation.
Subsidies aren’t free: “The problem with the DOE proposal is it’s attempting to address reliability challenges that exist today because of subsidies and regulations that favor renewables, with subsidies and regulations that favor coal and nuclear generation, and that just doesn't work,” Peacock said. “What happens when you pay traditional coal and nuclear generators for additional capacity is we don't get more capacity than before. Instead, what we are already paying for gets more expensive.”
Be like Texas: FERC does not have to act on Perry’s request. Peacock says FERC should heed the example of Texas. “Texas has most competitive electricity market in the nation,” Peacock said. “You buy your electricity, and you pay to whoever is selling it.”
RENEWABLE INDUSTRY LIVID OVER FUEL STANDARD PLANS: The renewable fuel industry is up in arms over a plan to upend the Environmental Protection Agency’s Renewable Fuel Standard that EPA Administrator Scott Pruitt is reportedly entertaining from Carl Icahn, the billionaire and former Trump adviser who until recently was thought to have been banished from Washington for interfering with the RFS.
The biofuel industry sent a letter Tuesday to President Trump, warning him of the problems with the new Icahn proposal.
Crediting exports: The changes would include the Icahn and Valero proposal to flood the market with credits that would reward refiners for exporting more ethanol and biofuels. That would “immediately devalue biofuel blends,” the groups said in the letter.
“The proposed changes are inconsistent with the law and threaten the growth and prosperity of the U.S. biofuels industry,” the letter said. “EPA’s changes are also inconsistent with Administrator Pruitt’s assurances to uphold the law and your long-standing support of ethanol and the RFS. If the proposed changes are finalized, EPA’s actions would cause severe harm to our industry, undermining your efforts to drive economic growth and secure America’s status as the global leader in biofuel production.”
Other beefs with the EPA: The letter also opposes EPA’s decision to go against staff recommendations for boosting annual blending requirements for advanced cellulosic biofuels, which are needed to meet the remaining goals under the program through 2022 now that corn ethanol is limited. It also opposes the EPA’s recent notice that it is mulling further cuts to all biofuels for 2019.
EPA meeting today: The EPA starts its Smart Sectors initiative Tuesday, holding meetings with a range of industry groups at its Washington headquarters. The new program looks to work closely with all industries in general on reducing regulations. The industries include everything from aerospace to concrete makers, but the oil industry is there, too.
SOLAR INDUSTRY DEBATES TARIFFS: The International Trade Committee is holding a public hearing Tuesday to hear from the solar industry on the types of tariff proposals the Trump administration could approve.
What’s happening: The commission has until November to recommend specific actions for President Trump to take, after the ITC ruled last month that the domestic solar panel industry is being hurt by low-cost imports, mostly from Asia.
Plenty at stake: The public hearing, expected to last all day, is high stakes for the thriving solar industry, which mostly opposes the potential trade measures requested by two struggling U.S. companies, Suniva and SolarWorld, which have asked Trump to act.
Industry pushback: Before the hearing began, the Washington Examiner spoke with Ed Fenster, chairman of San Francisco-based Sunrun, who was set to testify before the ITC against trade remedies.
‘No reason’ for tariff: “There is no economic or political reason there should be a remedy,” Fenster said. “The solar industry at-large cannot support those remedies, and there will be multiples of jobs lost relative to the small possibility of job gains, and a massive reduction in demand for solar.”
Solar’s light shines far and wide: Fenster’s perspective is representative of a wider solar industry view that tariffs, or import quotas, could harm the industry's progress by increasing their costs and forcing them to raise prices for consumers. Many U.S. solar company executives say the industry has evolved to keep pace with foreign producers of solar panels, becoming experts on other parts of the supply chain.
‘Stand for what’s right’: Sunrun is not a solar panel manufacturer. The company buys solar panels from overseas, mostly from Singapore, South Korea and Canada, and installs them on homeowners' roofs, selling customers the power the system generates. “We lead the residential solar industry now,” Fenster told us. “We can afford to come out here to do it [testify before the ITC], so it's our responsibility to stand for what's right.”
What’s next: The ITC must decide by Nov. 13 what type of remedies to propose to Trump, who then would have two months to decide whether to follow the commission’s advice or propose a different action. Potential remedies can range from the most severe — tariffs on imported cells and modules from anywhere in the world — to something more limited, such as job retraining for those who have lost work in the domestic panel industry.
‘The future:’ Fenster says he hopes the government takes a lighter hand and let the solar industry continue unimpeded. “Solar and wind, and [battery] storage are obviously the future,” Fenster said. “They will become lower cost, and in certain circumstances, are already lower cost than other forms of energy generation. All Americans deserve affordable, renewable power and the government should not be hastening that transition.”
PRUITT’S CALENDAR SHOWS INDUSTRY MEETINGS, FLIGHTS HOME: Pruitt regularly holds meetings, briefing sessions and speaking engagements with corporate executives and lobbyists of the industries he regulates, according to his schedule.
Life and times: The New York Times published the fullest accounting yet of Pruitt’s schedule since he took office in February. It covers 320 days from February through May.
A typical day: On April 26, Pruitt met over lunch with executives from the Southern Co., a coal-burning electric utility. That night, he dined at the Trump International Hotel with the board of Alliance Resource Partners, a coal-mining company whose chief executive donated nearly $2 million to Trump’s campaign. Also that day, he met with executives and lobbyists from General Motors, who were requesting Pruitt roll back Obama-era emissions standards on vehicles, which he later moved to do.
No place like home: Pruitt also has taken several government-funded trips home to Oklahoma, often with meetings and long periods of downtime. For example, Pruitt flew to Oklahoma May 19, toured a chemical company for three hours the next day, then returned to Washington Monday. The flight for that trip cost $2,122. The trips are being examined by the agency’s inspector general.
Par for the course?: The Times also reviewed the schedule of Obama’s last EPA administrator, Gina McCarthy. She held a disproportionate number of meetings with Democratic lawmakers and environmental groups. That was especially so in the summer of 2014, when the Obama administration proposing major climate-change regulations.
Pruitt’s defense: The EPA provided the Washington Examiner a list of the environmental, public health and consumer advocate groups Pruitt has met with as administrator.
They include: The Nature Conservancy, Audubon Society, American Public Health Association, National Association of Environmental Medicine, Association of Clean Water Administrators, Healthy Air Campaign and more.
ZINKE’S ‘LITTLE B.S.’ TURNS INTO A FULL-ON INVESTIGATION: The Interior Department's inspector general said Monday that it has started an investigation into Secretary Ryan Zinke's use of military and chartered flights.
"Late last week, the [Office of the Inspector General] opened an investigation into the secretary's travel," Nancy DiPaolo, spokeswoman for the office, said in an email to the Washington Examiner.
Politico reported last week that Zinke spent $12,000 for travel that included speaking to a professional sports team owned by a former campaign contributor.
Zinke called the reports on his use of private chartered flights a “little B.S.” while making remarks at the Heritage Foundation Friday.
UTILITIES KEEP AN EYE ON LAS VEGAS: A security partnership between the electric utility industry and the federal government is monitoring the situation in Las Vegas after a shooter killed at least 59 people and injured hundreds more in a rampage Sunday night.
The Electricity Subsector Coordinating Council, or ESCC, which was created to protect the nation's power grid from physical or cyberattacks, said it is "tied into [the Department of Homeland Security] and monitoring the situation," said Scott Aaronson, the Edison Electric Institute's executive director for security and part of the ESCC secretariat, in a statement to the Washington Examiner.
"Should anything be relevant to the electricity sector, we will be communicating that to our community," he added. The Edison Electric Institute is the lead trade association for the investor-owned utility sector. The electricity council is made up of power company CEOs and government officials.
New York Times GM and Ford describe plans to expand electric car models
Reuters China’s northern cities prepare for first winter to be heated by gas, not coal
Bloomberg A concept called “forced pooling” forces Colorado residents to allow horizontal drilling under their properties
NBC News A quarter of Puerto Rico will regain power by next month
Quartz A fossil fuel company is abandoning fossil fuels and changing its name
The Atlantic How climate change could impact rockfalls like Yosemite’s
Reuters Investors push U.S. shale companies to stop drilling when crude prices are depressed
WEDNESDAY, OCT. 4
10 a.m., 2318 Rayburn. The House Science, Space,and Technology Committee’s space subcommittee holds a hearing called “Powering Exploration: An Update on Radioisotope Production and Lessons Learned from Cassini.” The purpose is to evaluate NASA and the Department of Energy’s efforts to reconstitute the production of Plutonium-238 (Pu-238). Pu-238 is used in radioisotope thermonuclear generators that provide electrical power for spacecraft that cannot use solar energy, but production ceased in the 1980s.
2 p.m., Webinar, Global consulting firm ICF holds a webinar on the Energy Department’s draft proposed rule sent to FERC on Sept. 29 to redo market rules to help ailing coal and nuclear plants. The webinar is called, “DOE Acts to Upend the Energy Landscape.”
FRIDAY, OCT. 6
10 a.m., 11555 Rockville Pike, Rockville, Md. Nuclear Regulatory Commission meeting with Advisory Committee on Reactor Safeguards. The meeting will be webcast live.