Published on June 13th, 2018 | by Tina Casey0
Massive FERC Flop For Plan To Save Coal & Nuclear Power Plants
June 13th, 2018 by Tina Casey
The Trump Administration has devised a new plan for saving the nation’s aging fleet of coal and nuclear power plants, but so far it has been going over like a lead balloon. At a Senate hearing yesterday, all five members of the Federal Energy Regulatory Commission gave it the thumbs down.
Wait — what? Did you really think there was a chance the plan get the seal of approval from any of the FERC commissioners? Come to think of it, maybe. After all, the FERC Chairman himself was appointed by President* Trump. So, what went wrong at yesterday’s hearing?
What’s The Plan, Stan?
The new plan leverages the Energy Department’s authority to keep the electricity flowing under the federal Power Act. Here’s an explainer from the agency (emphasis added because that’s the important bit):
Under FPA section 202(c) during the continuance of a war in which the United States is engaged or when an emergency exists by reason of a sudden increase in the demand for electric energy, or a shortage of electric energy, or of facilities for the generation or transmission of electric energy, or of the fuel or water for generating facilities, or other causes, the Secretary of Energy may require by order temporary connections of facilities, and generation, delivery, interchange, or transmission of electricity as the Secretary determines will best meet the emergency and serve the public interest.
Fair enough. The question is whether or not an emergency exists, and at yesterday’s hearing the FERC commissioners couldn’t find anything in that long list of section 202(c) emergencies that would apply to the nation’s fleet of coal and nuclear power plants.
Meet The New Plan, Same As The Old Plan
More to the point, November’s midterm Congressional elections are fast approaching, so anything that looks like a taxpayer bailout is doomed to fail.
CleanTechnica predicted as much in a piece published Monday morning, before yesterday’s Senate hearing got under way:
Talk about tilting at windmills! If the Administration’s last such attempt at preserving the electricity generation model of the 20th century is any indication, this latest plan will go nowhere fast.
“Last such attempt” refers to last year’s plan to save coal and nuclear power plants. That one would have leveraged a Department of Energy grid reliability study that seemed tailor made to justify higher rates for uneconomical power plants.
The funny thing is, that grid study actually made a good case for wind energy.
Anyways, FERC wasn’t buying it. The commission formally rejected the whole idea this past January.
The weird thing is, the ink had barely dried on the rejection letter when Energy Secretary Rick Perry unveiled a major new plan for integrating more wind and solar into the national grid.
That’s part of a pattern with Secretary Perry. He does this thing where he would toes the Trump Administration on climate change and fossil fuels, while simultaneously — and vigorously — carrying forth his agency’s renewable energy mission.
Nobody Really Wants To Save These Old Power Plants, Anyways
The really funny thing about all of this is that the nation’s oil and gas stakeholders hate the idea of saving old coal and nuclear power plants, too.
Last year the powerful American Petroleum Institute pushed back against the new grid study early on, by making the case that natural gas power plants would do a better job of integrating more renewable energy into the grid.
This time around, API could hardly contain its glee after the Senate hearing on power plants:
At today’s Senate Energy and Natural Resources Committee hearing there was widespread agreement among all five FERC Commissioners on the fact that that there is NO emergency with our nation’s electric grid to justify bailouts to coal and nuclear power plants. The statements made by the FERC commissioners echo claims by grid operators that even with the coal and nuclear plant retirements, there will be plenty of electricity in the grid to meet energy needs.
Do tell! API followed up that statement with a long list of press clippings that describe yesterday’s debacle. Here’s a representative sample from the Houston Chronicle, citing FERC commissioner Robert F. Powelson (please support local journalism and follow the link):
I’m a little concerned about the narrative that’s being put out there. We’re going to need all these resources, but I don’t think its appropriate to put FERC in the arena of creating moral hazards in these markets. These markets are working hyper efficiently.”
Our friends over at Utility Dive culled some followup comments from Powelson, regarding the security of the nation’s sprawling natural gas pipeline network:
Let’s not just change the narrative and start going after the interstate pipeline system and saying it’s unreliable or a national security threat. There are issues that have popped up in pipeline security — physical and cyber — and I want to go back to the original point of working with the RTOs [regional transmission organizations] and national security agencies to take a more holistic approach.
Speaking of markets and RTOs, one of the nation’s largest RTOs is PJM Interconnection which serves 65 million people in 13 states and Washington, DC.
Here’s what Stu Bresler, PJM senior vice president for operations and markets, had to say in an online article just three weeks ago:
The PJM system is more reliable than ever, with robust reserve margins, and continues to incent significant private investment in new resource technologies. All of this is occurring while experiencing decreasing emissions at historically low wholesale electricity prices.
…the PJM markets have facilitated an unprecedented fuel and technology switch from older, less-efficient resources to advanced, increasingly efficient resources including demand response, energy efficiency and renewable energy.
Bottom line: it ain’t over ’til it’s over, but look for Perry to hold off on exercising those section 202(c) emergency powers, at least until after the November midterms.
Meanwhile, CleanTechnica is reaching out to PJM for some additional insights on the opportunities presented by innovation and fuel diversity, so stay tuned for that.
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Photo: Power plant by Tennessee Valley Authority via flickr.com, creative commons license.
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