Official: FERC, Other Agencies Identifying ‘Critical’ Coal, Nuclear Plants

An official with the Federal Energy Regulatory Commission (FERC) told a nuclear industry group this week that the agency and Trump administration officials are trying to identify power plants they consider critical to the nation’s grid. The move is seen as part of the White House effort to prop up the struggling U.S. coal and nuclear power industries.

Anthony Pugliese, FERC’s chief of staff, provided information during a talk before the American Nuclear Society, according to Rod Adams of Atomic Insights, a Virginia-based publishing company that produces content related to atomic energy. Adams shared audio of Pugliese’s remarks with E&E News. “We are working with DOD [Department of Defense] and DOE [Department of Energy] and NSC [National Security Council] to identify the plants that we think would be absolutely critical to ensuring that not only our military bases but things like hospitals and other critical infrastructure are able to be maintained, regardless of what natural or man-made disasters might occur,” Pugliese said.

The Trump administration wants to use Section 202(c) of the Federal Power Act (FPA) to force system operators to buy power from uneconomic coal and nuclear plants. The statute was originally designed as a wartime maneuver to ensure the nation’s supply of baseload power in the event of a national emergency. The DOE earlier this year said it has begun an analysis to identify critical infrastructure, and said it sees orders issued under the FPA as a “temporary stop-gap measure to prevent the further permanent loss of the fuel-secure electric generation capacity for the grid upon which our national security depends, much like the interstate highway system.”

Critics say such actions are nothing more than an attempt by the Trump administration to subsidize coal and nuclear power at the expense of other energy sources, including natural gas and renewables such as wind and solar power. Some grid operators have been vocal in their opposition to the move, with PJM Interconnection, the nation’s largest regional transmission organization (RTO), saying there is no need for “any such drastic action.”

FERC’s commissioners, along with several members of Congress, have said they do not support government intervention in U.S. power markets. FERC, an independent government agency that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce, last year dismissed a move by the Trump administration and DOE Secretary Rick Perry to require RTOs to adjust electricity rates to support power plants that show “reliability and resiliency attributes,” in effect coal and nuclear plants. Perry’s so-called Grid Resiliency Pricing Rule was hammered by the House Subcommittee on Energy in October 2017. Opponents, including many utility companies, said Perry’s proposal “picks winners and losers” and would distort energy markets.

FERC on August 9 issued a statement and said the agency is not involved in designing a plan to bail out struggling coal and nuclear plants.

“In response to a question after the speech, the Chief of Staff was simply stating that the federal government is working to ensure that important critical infrastructure, like hospitals, remains operational,” FERC said. “FERC is an independent agency and therefore has not assisted in the development of policy but provides technical assistance as subject matter experts.”

Pugliese reportedly told the nuclear group that FERC is looking for ways to “value resilience” among power plants and ensure that baseload generators remain financially viable. “It is incredibly important to the national security of the United States that we ensure that some of these critical assets like these nuclear plants do not go the way of the dodo bird,” Pugliese said. “I think it’s something that my staff, [FERC Chairman Kevin McIntyre], [Perry] and the president are interested in seeing come to fruition.”

Other than Thursday’s statement, McIntyre and the other four FERC commissioners have not spoken publicly about their role in the administration’s plan.

The administration has argued that natural gas pipelines are vulnerable to attacks and supply disruptions, which would threaten national security if baseload coal and nuclear generation is not readily available. “Nuclear is essentially impervious to [electromagnetic pulses] and cyberattacks, whereas you have a number of other assets [and] part of the bulk power system that are incredibly vulnerable. More and more, you have adversarial countries … who see pipelines, for example, as an area of great opportunity, let’s put it that way,” Pugliese said.

FERC is seen as an apolitical agency. Pugliese, though, reportedly said the group wants to expand its authority at the behest of the White House and the Republican-controlled Congress.

“We are currently working with the House and the Senate—I say we as in the administration, the White House and the FERC—to consider what legislative changes may need to take place to ensure that we have the ability and the authority to do just that,” Pugliese said.

Mary Anne Hitt, director of the Sierra Club’s Beyond Coal campaign, in a tweet on August 9 said: “FERC is supposed to be an independent agency that works to safeguard and stabilize the electric grid. But this is clear evidence that #coal & nuke cheerleaders desperate to bail out their bad decisions w/ your money are trying to seize control.”

The main federal government statutes directing FERC are the FPA and the Natural Gas Act (NGA). The FPA was most recently amended as part of the Energy Policy Act of 2005 during the administration of George W. Bush. The NGA, which regulates the transportation and sale of gas in interstate commerce and was first enacted in 1938, has not been changed since 1962 during the Kennedy administration.

Four of FERC’s five current commissioners were appointed by Trump. Only Cheryl LaFleur is a holdover from the Obama administration. Robert Powelson, who was confirmed as a commissioner in August 2017, is leaving the agency to become head of the National Association of Water Companies. The Politico website on August 8 said Trump will nominate Bernard McNamee, head of the DOE’s Office of Policy, to replace Powelson.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).