A coalition of strange bedfellows came together Friday to urge Energy Secretary Rick Perry to reject First Energy’s request for emergency relief for its ailing coal and nuclear fleet.
A letter from the American Council on Renewable Energy, American Petroleum Institute, and many other energy groups said First Energy’s request is just another version of Perry’s proposal for the Federal Energy Regulatory Commission to create market-based incentives for coal and nuclear plants facing economic hardship caused by low natural gas prices.
The company is “asking the secretary to second-guess FERC’s expert findings on a record substantially less developed than that in the FERC proceeding,” the letter read.
They said First Energy submitted extensive comments arguing its case in the FERC proceedings for the Perry plan, but failed. Most notably, First Energy could not make a compelling argument that demonstrated that creating incentives would not harm consumers by being “just and reasonable” under the law.
“This is particularly problematic where the proposed remedy is concerned, because Section 202(c) of the [Federal Power Act] unambiguously requires that any compensation required by the secretary be ‘just and reasonable,’” the coalition letter stated.
First Energy submitted a letter to Perry Thursday asking him to use the secretary’s special section 202 authority under the Federal Power Act to grant power plants the ability to continue to run for emergency reasons, which include war and supply disruptions.
But in doing so, First Energy is asking Perry “to disregard the Department of Energy’s own regulations, which clearly state that ‘economic factors relating to service … generally will not be considered as emergencies unless the inability to supply electric service is imminent,’” the coalition argued. “As recognized in the FERC proceeding …, there is no imminent threat.”
The coalition also pointed out that the company did not request a rehearing on FERC’s rejection of the Perry plan. Instead, it waited almost three months before “challenging FERC’s order.”
First Energy sent its request for emergency relief less than a day after announcing it would close three of its nuclear power plants in Ohio and Pennsylvania in the next three to four years. They want Perry to instruct FERC-overseen grid operator PJM Interconnection to institute a region-wide allowance for coal and nuclear plants to continue operating, while looking for ways to provide financial incentives to keep its power plants operational because of the stability they offer the grid.
A number of coal and nuclear plants in PJM Interconnection are slated to be closed for economic reasons related to the low cost of natural gas and renewables, which are dominating the electric power sector.
An Energy Department report issued this week underscored the need for coal and nuclear plants, recalling January’s “bomb cyclone” winter storm that drove up demand for electricity. The report illustrated that without coal and nuclear, the threat of blackouts would be real.
