Coal state lawmakers hounded the Federal Energy Regulatory Commission Tuesday over its rejection of coal plant subsidies proposed by Energy Secretary Rick Perry.
The biggest frustration was voiced by West Virginia and Ohio lawmakers during a hearing in the House Energy and Commerce Committee on FERC’s fiscal 2019 budget proposal.
“We keep having hearings, keep discussing it, but I want to move from the abstract to something concrete,” said Rep. David McKinley, R-W.Va., expressing his frustration over a lack of action to save coal plants on the verge of bankruptcy.
McKinley suggested that the federal grid watchdog was not adequately addressing the economic impact its action, or inaction, has had on coal states.
He brought up a power plant in Pleasants County, W.Va., as an example of the fallout if something isn’t done.
The plant he referred to is a 1.3-gigawatt coal plant owned by the Ohio-based utility First Energy. The company is asking the Energy Department to save its coal plants by applying a rarely used emergency authority to order the plants to stay online. Perry has not acted on the request, but the First Energy plan is facing enormous pushback by the oil and natural gas industry, merchant utilities, renewable energy trade groups, and others.
“They tried to sell that plant … they tried to move it over to the regulated [market] and they were denied,” McKinley said. “So, as a result the operator is seriously considering, and I believe it will happen before the end of the year, of declaring bankruptcy and shutting that plant down.”
He said the ramifications would be devastating, not just for the plant workers and the tax revenue the plant provides to the county, but also the mines that feed the plant.
“If this power plant closes down, very high likelihood that the coal producer that supplies that power plant will similarly declare bankruptcy,” he said.
“Wouldn’t it be more efficient and prudent to try to find a vehicle, a means, whether it’s the 403, whether it’s the 202(c), some modification of that, so we can keep some of our marginal power plants operative?” Mckinley asked.
First Energy is asking for Perry to issue an emergency order under section 202(c) of the Federal Power Act. FERC was asked by Perry before that to create market-based incentives for coal plants under section 403 of the act, which was rejected by the commission. The commission has no authority under section 202(c) and has not commented directly on the proposal.
McKinley demanded that FERC Chairman Kevin McIntyre disclose the cost of implementing the Perry plan that the commission rebuffed.
“When FERC denied the 403, did anyone come up with what the cost to the consumer could have been if 403 was imposed on, say, Pleasants County’s power plant?” he asked.
McIntyre conferred quietly with his staff and fellow four commissions at the hearing. “I guess the answer is none of you know,” McKinley chided.
McIntyre apologized for the delay in answering, saying, “I do not have that figure,” but would do his best to get him one.
McKinley shot back that the cost would be $50 per year, per customer, suggesting the cost would be low.
“The consumer is currently paying $50 per year for tree trimming,” he said. “I think we have a moral responsibility to look at this thing holistically, rather than just an ideological fight against what we think is a free market.”
First Energy has criticized FERC for its inaction.
Rep. Bill Johnson, R-Ohio, asked the commissioners to respond to recent criticisms made by coal magnate Bob Murray, whom he described as an employer in his district.
“I take offense to the word ‘feckless’ being used to [describe my] colleagues I serve with here,” said Republican FERC Commissioner Rob Powelson, quoting from a speech Murray made in New York last week.
Neil Chatterjee, former acting chairman, said during consideration of the Perry proposal that he “expressed great sympathy” for coal communities.
“I am a conservative, I believe in a narrow interpretation of statute, and my narrow reading of the record in this case was that it simply didn’t support it,” Chatterjee said. “And while I have deep sympathy for the sentiments that Mr. Murray, folks in your community, are expressing and the concerns they have about the economic impact, the job impact, the cultural impact of these shutdowns, from the seat I sit in now, the record simply didn’t support our taking action at that time.”
McIntyre repeated throughout the questioning that he supports an all-of-the-above energy policy. He said FERC is working through its own resilience examination after it rejected the Perry proposal.
“My view is we very well need to be an all-of-the-above policy,” he said. Finding ways to better value power assets is a question the commission is exploring.
McIntyre said that if FERC finds that coal or nuclear plants are providing attributes to the grid that “are not being adequately compensated,” then the “commission has to decide what it needs to do.”
Chatterjee noted that the process may take a long time, which is why he had argued for an interim policy in rejecting the Perry plan.
“I remain concerned about the lack of urgency,” said Rep. Larry Bucshon, R-Ind., adding that studies have concluded that coal-fired electricity was needed to prevent blackouts during past cold snaps and other weather events. He has introduced legislation that would implement an interim plan to save coal plants from closing prematurely while FERC looks for a longer-term solution.
Every coal mine in Indiana is in Bucshon’s district, as are many of the state’s power plants, he said. Thirty-four plants in the state have closed in the last decade
His bill would give coal plants a “temporary tax credit” while FERC addresses resilience, he said.
A companion bill was introduced Monday in the Senate by Sen. Shelley Moore Capito, R-W.Va.
