trending Market Intelligence /marketintelligence/en/news-insights/trending/97a0pmdipz1vjqqf7dt-bw2 content esgSubNav
In This List

FERC asserts independence from Trump effort to save coal, nuclear plants


Infographic: The Big Picture 2024 – Energy Transition Outlook


The Big Picture: 2024 Energy Transition Industry Outlook

Case Study

An Oil and Gas Company's Roadmap for Strategic Insights in a Quickly Evolving Regulatory Landscape


Essential IR Insights Newsletter Fall - 2023

FERC asserts independence from Trump effort to save coal, nuclear plants

The Federal Energy Regulatory Commission said it has not aided the Trump administration's efforts to craft policies to benefit certain coal-fired and nuclear power plants, maintaining its role as an independent federal agency.

A commission spokesman made the comments in response to concerns over FERC's part in helping the U.S. Department of Energy and National Security Council draft a list of power plants they deem critical for grid reliability and that the administration may make eligible for federally mandated financial support.

Although FERC provides technical assistance to other agencies on matters within its expertise, the commission "is an independent agency and therefore has not assisted in the development of policy," FERC spokesperson Craig Cano said.

At a recent American Nuclear Society gathering, FERC Chairman Kevin McIntyre's Chief of Staff Anthony Pugliese said the commission is working with the U.S. Department of Defense, the DOE and the 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 nuclear plants and other generating stations with on-site fuel supply are crucial to national security and that the U.S. must take action so those facilities "do not go the way of... the dodo bird." S&P Global obtained a recording of Pugliese's speech that E&E News first reported on Aug. 9.

Pugliese's comments touched off concerns that FERC may be compromising its role as an independent agency by helping the administration carry out one of its key policy objectives — to throw a lifeline to financially struggling coal-fired and nuclear plants in the name of grid resilience and national security. Although coal and nuclear proponents say that lifeline is necessary to protect the grid, critics say such a plan will distort competitive power markets and unfairly disadvantage other forms of energy including natural gas and renewable resources.

"FERC is supposed to be an independent agency that works to safeguard and stabilize the electric grid," said Mary Anne Hitt, director of the environmental group Sierra Club's Beyond Coal campaign. "But this is clear evidence that coal [and nuclear] cheerleaders desperate to bail out their bad decisions [with] your money are trying to seize control."

But Cano said Pugliese "was simply stating that the federal government is working to ensure that important critical infrastructure, like hospitals, remains operational."

In addition, FERC tasks regional grid operators and reliability officials with identifying the power plants and other facilities that are critical for maintaining grid reliability. Thus, even if FERC were asked to help draw up such a list, the amount of assistance it could provide without their help is uncertain.

In a draft plan leaked in late May, the DOE proposed requiring regional grid operators to buy power or capacity for two years from certain "fuel secure" power plants, including some running on coal and nuclear energy, while the government determined what generating units may be critical to the national defense. The plan, however, was not final and the administration has yet to announce a final course of action.

Former FERC Commissioner Tony Clark said providing technical input to other federal agencies on electric reliability initiatives would not be extraordinary for FERC, although Clark said he was not familiar with what the commission is doing in this case. Clark noted the U.S. Environmental Protection Agency reached out to FERC on reliability issues while the EPA crafted the Clean Power Plan, the Obama administration policy to lower carbon dioxide emissions from existing fossil fuel-fired power plants.

"So long as FERC's ability to independently adjudicate statutory matters before it is not impacted, I personally think it is preferable that other agencies in government do pick up the phone and ask for FERC's technical input," Clark said. "If they didn't, I suspect they would be criticized for not asking the agency with the best technical expertise for its insight."

But Pugliese's comments are still unusual, with FERC chiefs of staff rarely giving speeches on the commission's work. In addition, FERC in January rejected a prior DOE proposal aimed at propping up coal-fired and nuclear plants at risk of retirement. The commission said DOE did not prove that its request, which would have required grid operators to ensure full cost recovery for plants that stored at least 90 days of fuel onsite, was just and reasonable and needed to ensure grid reliability.

Despite rejecting the DOE's plan, FERC launched a new proceeding to gather feedback from grid operators and other industry stakeholders on their resilience concerns. The commission has yet to propose any new policies, but "we need to value resilience in how we create the market" Pugliese said at the American Nuclear Society event. "My hope is that we will have an answer to that in the relatively near future," he said.