Members of the Federal Energy Regulatory Commission on Tuesday morning criticized President Trump’s order for Energy Secretary Rick Perry to prevent the closing of financially struggling coal and nuclear plants.
Republican FERC Chairman Kevin McIntyre dismissed claims by the Trump administration that the reliability of the power grid is facing immediate risk because of planned coal and nuclear plant closures in the next several years.
“There is no immediate calamity or threat to our ongoing ability of the bulk power system to operate and serve our energy needs,” McIntyre said in comments before the Senate Energy and Natural Resources Committee, in which all five commission members testified.
The Energy Department, according to a leaked memo it drafted, is considering requiring regional grid operators to buy power from select coal and nuclear plants for two years, using executive authority under emergency provisions of the Federal Power Act and the Defense Production Act.
FirstEnergy Solutions, a Ohio utility with coal and nuclear plants facing closure, has asked Perry to use the authority, which the Energy Department can invoke to order certain power facilities to stay open in a crisis.
Richard Glick, a Democratic FERC commissioner, rejected the Energy Department’s national security rationale for taking action.
“We cannot try to stop the natural evolution of this industry by a declaring national security emergency unless there is evidence such an emergency exists,” Glick said.
Later, Sen. Martin Heinrich, D-N.M., asked commissioners individually if they believe there is a national security emergency facing the power grid. None of the commissioners said an emergency exists.
Most of the energy industry and policy experts have said potential action from Perry could undermine wholesale competitive power markets that produce lower costs for consumers. Expensive coal and nuclear plants are increasingly losing out to cheaper natural gas and renewables in competitive power auctions.
The Trump administration argues that closing coal and nuclear plants, which run around the clock, would leave the power grid vulnerable, because there is a shortage of pipelines to transit natural gas, and renewables such as wind and solar only produce power intermittently.
FERC last year rejected a previous version of the Energy Department’s plan to provide special payments to coal and nuclear plants that could store 90 days of fuel on-site.
“FERC does not pick winners and losers in the market,” said Robert Powelson, a Republican commissioner. “A hard and fast mandate on these markets could evaporate all the goodwill consumers have seen. To erode that would be a real step back in the bulk power system.”
Powelson said the unregulated competitive wholesale power markets are working “hyper efficiently right now,” and he called transitioning the markets about two decades ago a “phenomenal success story.”
“The restructuring of these markets is the one of the largest transfers of wealth in this nation and I think it’s something we should not retreat on,” Poweslon said.
Committee Chairwoman Lisa Murkowski, R-Alaska, told the commissioners “I have my concerns” about Trump’s order to Perry, and said she sees no evidence that lost coal and nuclear power is weakening the electricity grid.
“It seems the retirements have not reached the point where the quality of electric service has been visibly compromised,” Murkowski said.
But Murkowski said she regretted that past FERC commissions have not paid enough attention to the long-term resilience of the power grid and how the changing energy mix may affect that.
“This is mortal conflict for some,” Murkowski said. “We haven’t seen decisive action, and as a result we have this vacuum.”
Neal Chatterjee, a Republican commissioner, said FERC should consider how to better value coal and nuclear plants in power markets.
Chatterjee said he agrees with the Energy Department that natural gas pipelines are vulnerable to cyber attacks, citing recent attacks against the data networks that pipeline operators use.
“People are too quickly dismissing it [the Energy Department memo],” Chatterjee said. “There are a number of points in the memo that are thoroughly well researched. We can disagree on what the remedy may be, but they raise a real issue. We need to look at it.”
FERC, in rejecting Perry’s original plan, directed regional transmission operators to submit information on resilience challenges in their markets.
FERC is reviewing comments submitted from the nation’s federally overseen grid operators, which run about 70 percent of the U.S. power supply.
But the Energy Department, and some coal state senators, contend action cannot wait for the FERC process to play out.
Sens. Shelley Moore Capito, a Republican, and Joe Manchin, a Democrat, of West Virginia, said closing plants have damaged their state’s economy, and propping up coal may be necessary to balance out subsidies provided to wind and solar power.
“Our electric markets are inherently artificial construct,” Moore Capito said. “There is merit to intervention now to restore some balance.”
Commissioners also reiterated that Perry likely has the authority to take executive action to keep alive coal and nuclear and nuclear plants, and described the role FERC would have in implementing it.
Democrats, and some FERC commissioners, said forcing grid operators to buy more expensive coal and nuclear power undoubtedly would raise electricity bill rates for consumers.
“What the memo is requiring is that instead of lower cost energy being dispatched they dispatch higher cost energy,” Glick said. “It would clearly raise rates, the question is how much.”
And there is little FERC could do to stop that.
“Not only is the underlying policy wrong it also threatens on your independence and oversight,” Sen. Maria Cantwell of Washington, the top Democrat on the committee, told FERC commissioners.
