Coal and Nuclear Generators are Still Seeking Federal Help

The Federal Energy Regulatory Commission’s January denial of an Department of Energy (DOE) request that FERC ensure grid reliability by propping up coal and nuclear generating plants did not end industry attempts to obtain assistance from the Trump administration. FirstEnergy, an Ohio-based utility that serves 6 million customers, made an emergency request last week to the Department of Energy (“DOE”) following its announcement that a subsidiary would close three nuclear plants. The company has asked that DOE order PJM, the Regional Transmission Organization that manages the grid in 13 states and Washington D.C., to compensate FirstEnergy for the “full benefits” that its coal and nuclear plants provide.

Under Federal Power Act section 202(c), the Secretary may, in an emergency, “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.” Secretary Perry has invoked such orders twice, both times to support coal plants.

To support its request, the FirstEnergy letter uses evidence from a recent National Energy Technology Laboratory study on energy utilization during this winter’s “bomb cyclone” in the Northeast. One of the takeaways from the NETL study was that coal is “the most resilient form of generation” and renewables underperformed as demand increased during the storm, giving rise to the conclusion that retirement of coal and nuclear plants could lead to reliability issues. This blog post, by NRDC’s John Moore, contends that he NETL study relies on a flawed metric, that counting expensive, typically-offline coal and nuclear plants as “more resilient” because they were put online during a weather event leads to a the wrong conclusion. And NETL ignores that an overwhelming majority of grid disruptions result from distribution problems, not fuel supply issues.

In a response letter to Secretary Perry, PJM argued that there is no emergency under the meaning of Section 202(c), and noted that most of the announced closures pertained to plants that would remain operational until 2021.  According to PJM, there is no immediate threat to system reliability from FirstEnergy closures. PJM had previously found that the grid performed reliably during the cold winter weather.

Obviously, PJM is an interested party, since it (and its customers) will pay if DOE grants FirstEnergy’s request. But the broad trend has been toward evidence that supports the idea that grid resilience has not been harmed by the growth of renewables. For example, an Amicus Brief, submitted in support of the Clean Power Plan by Emmett Institute members repeatedly and strongly makes this point. Evidence gathered since then has only buttressed the arguments made in that Brief. Although the Trump Administration has a stated interest in aiding the coal and nuclear industries, and resilience in the face of plant closures is an issue to address, this may neither be either an emergency under FPA 202(c), nor the threat to resiliency that FirstEnergy describes. As stated by FERC in its January 8th refusal to prop up coal and nuclear, “the extensive comments submitted by the RTOs/ISOs do not point to any past or planned generator retirements that may be a threat to grid resilience.”