U.S. Starts Picking Power-Plant Winners for Emergency Aid

(Bloomberg) -- The Federal Energy Regulatory Commission is helping the Trump administration identify “critical” coal and nuclear power plants, a key step in the White House’s contentious plan to keep those facilities online in the name of national security.

Anthony Pugliese, FERC’s chief of staff, told an American Nuclear Society conference this week that the agency is helping the National Security Council as well as the departments of Defense and Energy determine which facilities should be deemed critical.

“We are working with DOD and 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 is able to be maintained, regardless of what natural or man-made disasters might occur,” Pugliese said, according to an audio recording of the remarks shared with Bloomberg News.

Donald Hoffman, the president of consultancy Excel Services Corp. and chairman of the conference, confirmed Pugliese’s comments.

FERC spokesman Craig Cano said Pugliese, in response to a question, “was simply stating that the federal government is working to ensure that important critical infrastructure, like hospitals, remains operational.”

Independent Agency

“FERC is an independent agency and therefore has not assisted in the development of policy, but provides technical assistance as subject matter experts,” Cano said in an email.

Pugliese’s remarks show the Trump administration is still developing plans to stem coal and nuclear power plant closures in the name of national security, despite criticism that the efforts would represent an unprecedented intrusion into U.S. power markets. The remarks also are raising eyebrows because they suggest FERC, an independent energy regulator, is working in tandem with the White House on the plan, stoking concerns the agency is being inappropriately politicized.

Pugliese previously served as a member of the Trump administration’s transition team and as a senior White House adviser at the Department of Transportation. His remarks were earlier reported by E&E News.

‘Massive Bailout’

“It appears as though the commission is secretly working on a massive bailout program” which conflicts with FERC’s mandate to conduct its activity “in a transparent, docketed process,” said Tyson Slocum, director of the energy program at the watchdog group Public Citizen.

The list is essential to the Trump administration’s developing plans to bolster money-losing coal and nuclear power plants at risk of closing in the face of competition from cheap natural gas. The administration is still honing possible interventions, including mandating electricity purchases and establishing a strategic reserve of critical power generators, in order to buy time for a two-year study of vulnerabilities in the American energy delivery system.

President Donald Trump asked Energy Secretary Rick Perry to take immediate action on June 1. Some administration officials have raised concerns about the legality of the efforts, which could be undertaken under a Cold-War-era statute designed to protect national security and a separate law empowering the Energy Department to order guaranteed profits for power plants amid grid emergencies.

Grid Dependability

The Trump administration argues the loss of coal and nuclear plants is harming the dependability of the power grid and its ability to recover from storms or cyber attacks. Supporters say coal and nuclear power plants are essential because they produce electricity that isn’t dependent on natural gas from pipelines that can be disrupted, wind that can stop blowing, or a sun that sets.

FERC’s involvement now stands in contrast to the commission’s January vote to reject a previous administration plan to subsidize coal and nuclear plants put forth by the Energy Department.

The administration has yet to reveal its final strategy, including the number of plants that would be targeted and what kind of financial support they could receive, but a draft memo obtained by Bloomberg News illustrated how it could work: the Energy Department may compel the purchase of power or electric generation capacity from a designated list of facilities to forestall their closing.

Perry told reporters in June that the administration was conducting a cost analysis, but the price tag should be considered secondary to the value of keeping America “free, to keep the lights on.”

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