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GOP lawmakers call out FERC for inaction on grid resilience, seek answers on next steps


Resilience docket opened nearly three years ago

Coal interests eye resilience definition recognizing fuel security

  • Author
  • Jasmin Melvin
  • Editor
  • Derek Sands
  • Commodity
  • Coal Electric Power
  • Topic
  • US Policy

Washington — A recent push by Republican US lawmakers urging the Federal Energy Regulatory Commission to finally define grid resilience and take action to ensure coal's continued place in the energy mix is unlikely to spur any new policies this late in the game, a power industry observer said Nov. 23.

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Twenty-two Republicans across the Senate and House criticized FERC's inaction on a grid resilience review (AD18-7) opened nearly three years ago. FERC opened the docket in January 2018 after a full complement of five commissioners unanimously rejected a proposed rulemaking from the Department of Energy aimed at staving off retirements of coal and nuclear units facing market pressure from cheaper natural gas and renewables (RM18-1).

"However, since the comment period closed on the resilience docket in April 2018, it does not appear that FERC has taken any measurable, additional actions. Meanwhile, fuel-secure traditional baseload resources continue to close at an alarming rate," Republican Senators John Hoeven of North Dakota, Shelley Moore Capito of West Virginia, Kevin Cramer of North Dakota, John Barrasso of Wyoming and Mike Lee of Utah said in a Nov. 18 letter to FERC Chairman James Danly.

The states they represent accounted for 58% of US coal production in 2019, according to data from the Energy Information Administration.

The senators asserted that "by the end of next year, nearly 42,000 MW of coal-fired electric generation will have closed from the time FERC opened the resilience docket."

The S&P Global Platts Analytics North American Electricity Long Term Forecast expects installed US coal capacity to plummet 62% between 2020 and 2035 to 84 GW.

A group of 17 lawmakers in the House, led by Representative David McKinley, Republican-West Virginia, sent a similar letter to Danly Nov. 18 that also noted significant nuclear- and gas-fired power plant retirements.

New leadership

The letters from lawmakers follow a leadership change at the commission that was purportedly prompted by the former chairman's support of carbon pricing. The White House has maintained a skeptical tone on climate science and President Donald Trump has generally opposed policy aimed at mitigating climate change.

FERC declined to comment on the letters or the status of the resilience docket. Danly, who has been very tight-lipped with the press, has not provided much insight into his position on the resilience docket.

During his confirmation hearing in November 2019, he told lawmakers he would have joined other commissioners in voting to reject DOE's proposal that would have effectively subsidized uneconomic coal and nuclear power plants. But beyond that, he gave few hints of his views on wholesale power market design, grid resilience or support for baseload generation.

But the likely short tenure of Danly's chairmanship is seen dampening GOP hopes for any FERC-backed initiatives supportive of coal. He is likely to lose the gavel following inauguration in January, after which President-elect Joe Biden is expected to put a Democrat at the helm of the agency.

"It's a little late in the day for any sort of dramatic changes to policies," longtime Republican energy lobbyist Mike McKenna, a former Trump adviser, said in an email Nov. 23.

"There may be as many as two votes or as few as zero votes for anything on grid resilience that would emphasize generation enough to make a material difference to coal-fueled generation," he said. "I don't think that changes throughout 2021."

Defining resilience

Both letters from lawmakers referenced power supply shortages in California during a summer heat wave that led to rolling blackouts in August and cast part of the blame on the state's increasing reliance on intermittent resources.

The letters ask FERC to outline work it has completed or intends to take to evaluate grid resilience, address challenges facing grid operators and strengthen the reliability of the grid.

The letters also specifically seek input on the commission's work to define resilience and whether fuel security attributes will be incorporated into that definition.

FERC in 2018 noted that DOE's proposal did not define the term resilience and that there was "no uniform definition" used across the electric utility industry. As such, the commission sought comments on how the term should be defined.

Commissioner Neil Chatterjee said in October 2019, while serving as chairman, that he wanted the agency to reach a "consensus" on how grid resilience should be defined before advancing a proceeding that US coal interests hoped would generate life-extending revenues for struggling plants.

But the commission has been mostly mum on the issue since then, frustrating the coal sector as well as public utility commissioners and lawmakers in coal-reliant states who want the agency to define the term in a way that recognizes coal plants' ability to store fuel on-site.

DOE's proposal and other efforts to curb baseload retirements, however, have been panned by much of the power sector as bailouts to prop up uneconomic generation.