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FERC chairman wants 'consensus' before moving forward on grid resilience docket

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Federal Energy Regulatory Commission Chairman Neil Chatterjee speaks at Senate confirmation hearing.
Source: U.S. Senate

Federal Energy Regulatory Commission Chairman Neil Chatterjee said Oct. 21 that he wants the agency to reach a "consensus" on how grid resilience should be defined before advancing a proceeding that U.S. coal interests are hoping will generate life-extending revenues for struggling plants.

FERC launched the proceeding (FERC docket AD18-7) in January 2018 after a full complement of five commissioners unanimously rejected a proposed rulemaking from the U.S. Department of Energy that would have effectively subsidized uneconomic coal- and nuclear-fired units.

Noting that the DOE proposal did not define the term resilience and "no uniform definition" is used across the electric utility industry, FERC sought comment on how the term should be defined. Twenty months later, however, FERC has taken no further action on the matter. That inaction has frustrated public utility commissioners in coal-reliant states and figures like coal baron Bob Murray, who want the agency to define the term in a way that recognizes coal plants' ability to store fuel on-site.

In September, utility regulators in Montana and Wyoming sent letters to FERC pressing the agency to "expedite consideration" of the proceeding and "make a decision." Documents later obtained by watchdog group the Energy and Policy Institute through public records requests showed that those commissioners along with regulators in Tennessee, Alabama, West Virginia, and Kentucky sent the letters after they were provided a template by the coal lobbying group American Coalition for Clean Coal Electricity, or ACCCE.

The letters "are all identical in substance, and they don't identify an actual reliability or resilience issue or even say what they want FERC to do," Jeff Dennis, a former FERC lawyer who is now managing director and general counsel at Advanced Energy Economy, a clean energy trade group, wrote on Twitter following the disclosure.

But Murray was more explicit in Oct. 21 remarks at the inaugural EnVision Forum co-hosted by Chatterjee and the University of Kentucky Center for Applied Energy Research, held in Lexington, Ky.

"We do not even have a uniform definition of resilience from FERC, or criteria for measuring it," the Murray Energy Corp. CEO said. Repeatedly referring to FERC as "feckless," Murray urged the commission, states and the Trump administration to "take steps immediately to ensure that we have reliable, resilient and affordable electricity, and that means immediately keeping what remains of the coal fleet."

In a recent phone interview, ACCCE President and CEO Michelle Bloodworth said the letters to FERC were a natural result of the group's presence at meetings hosted by the National Association of Regulatory Utility Commissioners. "At those meetings, we've told state utility commissioners from pretty much all of the states of the importance and the need for FERC to act," Bloodworth said. "That's been no secret."

As part of the resiliency proceeding, ACCCE submitted comments encouraging FERC to issue an order that prompts wholesale markets to explicitly value resilience using a definition that ties coal plants to reliability. "We think that once you define resilience, that would lead to valuing the attributes such as fuel security," Bloodworth said.

Acting on evidence

Chatterjee told reporters Oct. 21 that he expects the Republican-controlled commission, which is currently down two members, to act as one on a definition of grid resilience before moving forward.

"We're going to have a consensus definition of resilience that I believe will be unanimous amongst my colleagues and should not be controversial in any way, shape or form," he said. "Whether that consensus is 3-0, 4-0, or 5-0, the main thing is it's 'something to 0,' and so if we can get consensus amongst the three of us, I'm very comfortable moving forward."

In explaining why the commission has not acted after 20 months, Chatterjee said the reason the review is taking so long is that FERC is "trying to get it right." "I'm hopeful that in doing it right, we'll be able to achieve that consensus," he said.

With Democratic Commissioner Richard Glick sparring recently with his colleagues over the assertion that coal-fired units provide an important source of winter generation in the Northeast, that consensus could prove elusive, however.

Another potential roadblock to defining resilience in a way that would provide support for coal-fired resources is a lack of evidential support, said Jon Wellinghoff, FERC's chairman from 2009 to 2013.

"FERC is a regulatory agency that acts under the Administrative Procedures Act, and it has to act on evidence," Wellinghoff, now CEO of Gridpolicy Inc., said in an Oct. 21 interview. "So if there's no evidence that those types of units provide for resiliency, there's no basis for them to proceed."

Chatterjee also acknowledged the possibility that the resilience docket may not find that the coal resources Murray wants to keep online are needed for grid resilience. "To be clear, it could be that at the conclusion of our examination, we find that there is not a threat to what we define to be the resilience of the grid," Chatterjee said.