Members of the Federal Energy Regulatory Commission on Tuesday vowed to uphold their mission of making fuel-neutral decisions as independent arbiters in a hyper-politicized energy environment, after being pressured by Energy Secretary Rick Perry to subsidize coal and nuclear plants.
In a highly anticipated decision, FERC last week voted unanimously to reject a proposal from Perry to provide special payments to struggling coal and nuclear plants. And in their first public comments since then, FERC members defended that move.
“It’s up to the secretary if he proposes more ideas like this,” said Cheryl LaFleur, a Democratic FERC commissioner, at an event Tuesday morning hosted by the Bipartisan Policy Institute. “What's important to me is whatever gets proposed, we act as an independent agency to uphold the laws we are sworn to do, and that's what we did here. I was very happy we were able to come up with a consensus order. It felt like a very FERC-like day and in my value system, that felt good.”
Neil Chatterjee, a Republican nominated to FERC by President Trump, admitted he was initially sympathetic to Perry’s proposal and frequently suggested he would support it. He previously worked for Senate Majority Leader Mitch McConnell, R-Ky., as his top energy policy adviser, and is especially sensitive to the impact of coal’s decline in their state.
“There is no question I worked for a home state senator who focused on the preservation of coal generation due to the impact on the constituency he represents,” Chatterjee said Tuesday morning of McConnell. “We need to focus on easing the transition to the future, not slowing the transition to the past. I am very sensitive to that transition because I grew up with people suffering from that transition.”
But he said he came to view Perry’s plan as biased toward coal and nuclear and legally vulnerable, because it would have rewarded those plants for their ability to maintain 90 days of fuel supply, an arbitrary metric that does not necessarily translate to resilience.
“As we went through the process I appreciated the fact-based process the commission takes,” Chatterjee said. “One of the things difficult about the [proposal] was the focus on a 90-day fuel supply to favor particular fuel sources. As we built the record and did the analysis, I came to the conclusion that while I feel Secretary Perry asked the right question, he proposed the wrong remedy. The remedy he proposed did not meet the legal test.”
FERC, in rejecting Perry’s plan, directed regional transmission operators to provide more information about resilience to help the commission examine the matter “holistically.”
The commission wants the grid operators, such as PJM Interconnection and the Midcontinent Independent System Operator, to submit information over the 60 days on resilience challenges in their markets.
Chatterjee and LaFleur said they anticipate the grid operators to bring forward unique proposals that reflect the grid characteristics of the markets they represent.
“We will hear different things from different markets,” LeFleur said. “If there is something we should do, let’s do it and get on with it. [FERC’s role] is pretty simple. We have to keep the lights on for everyone at the least cost we can. If customers have to pay for something, we have to make sure they need it.”
Chatterjee said he expects Perry and other Trump administration officials to try to boost the coal and nuclear industry, but said FERC would be a check on actions that could interfere with competitive power markets.
“I do believe elected officials will continue to fight for the various modes of power generation to the constituents they represent,” Chatterjee said. “It’s FERC’s role to block that out and focus on a fact-based, legally justified path forward.”