Top U.S. Regulators Don't Back Claim That Grid Faces Emergency

(Bloomberg) -- Top U.S. energy regulators declined to endorse the notion that power grids face a national emergency during a Senate hearing Tuesday, tacitly rebuffing President Donald Trump’s argument to prop up struggling coal and nuclear plants.

The five members of the Federal Energy Regulatory Commission were testifying before the Senate Energy and Natural Resources Committee when asked by New Mexico Democrat Martin Heinrich if the decline in coal and nuclear electricity is putting the nation’s security at risk.

“Do any of you believe that in the wholesale power markets we are facing an actual national security emergency at the moment?” Heinrich said. “Any one able to answer that with a ’yes?”’

All five regulators remained silent.

Prior to Heinrich’s question, FERC Chairman Kevin McIntyre said, “there is no immediate calamity or threat to our ongoing ability to have our bulk power system operate and satisfy the energy needs.” He added that the long-term issue needed to be studied.

Earlier this month, Trump ordered Energy Secretary Rick Perry to take immediate action to stem further coal and nuclear plant closures in the name of national security. Separately, an Energy Department draft memo obtained by Bloomberg outlined a plan to force grid operators to buy supplies from struggling plants. It also proposed establishing a strategic electric generation reserve.

While most members of the commission were silent on the question of security, they were quick to opine on the latest push to bail out plants.

Robert Powelson said Trump’s directive threatens “to collapse the wholesale competitive markets that have long been a cornerstone of FERC policy.” Neil Chatterjee said not taking action to ensure the grid’s resilience is“akin to driving a car without a seat belt.” McIntyre said the commission is separately reviewing feedback from grid operators and other interested parties on whether further action by FERC is needed to prop up the system.

The energy commission, an independent panel, rejected a similar proposal earlier this year. That plan sought to compensate coal and nuclear plants for their ability to store at least 90 days of fuel on site.

The latest approach involves the use of a pair of a pair of federal laws: the Federal Power Act that allows the government to guarantee profits for power plants amid grid emergencies, and the 68-year-old Defense Production Act, invoked by President Harry Truman to aid the steel industry.

To contact the reporters on this story: Stephen Cunningham in Washington at scunningha10@bloomberg.net;Ari Natter in Washington at anatter5@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Joe Ryan, Catherine Traywick

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