Democrats Urge Energy Regulator to Reject Pro-Coal Proposal

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By Rebecca Kern

Sen. Maria Cantwell (D-Wash.) is pressing the Federal Energy Regulatory Commission to reject an Energy Department proposal aimed at propping up coal and nuclear plants in certain competitive energy markets, saying it’s ultimately bad for consumers.

“We want [FERC] to adhere to what is their main focus under the Federal Power Act, and that is just and reasonable rates for consumers,” Cantwell told Bloomberg Environment in an Oct. 17 interview. “The agency’s job is not to try to pick a winner and guarantee its place in the market, and then raise rates on consumers.”

Cantwell, ranking member of the Senate Energy and Natural Resources Committee, along with nine other Democratic senators and Sen. Angus King, a Maine independent, are urging the Federal Energy Regulatory Commission to throw out the “ill-conceived” proposal, according to a copy of a letter obtained by Bloomberg Environment.

The senators join opposition to the proposal that’s come from renewables, oil and natural gas groups as well as free-market think tanks, consumer advocacy groups, and environmental organizations.

The Energy Department directed FERC in a Sept. 28 proposal to act within 60 days to make market reforms to assist electricity generators that store 90 days of fuel on-site fuel, namely coal and nuclear plants, in certain competitive energy markets. Historically low natural gas prices in these markets are making it difficult for coal and nuclear plants to cover their operating costs.

FERC Chairman Neil Chatterjee has said FERC plans to address the issue of compensating resources for their attributes like on-site fuel supply and nearly always-on power, while also ensuring the markets stay intact. They can do so by rulemaking or other tools, such as technical conferences.

Questioning DOE Resiliency Assertion

The Democratic senators questioned the DOE proposal’s assertion that helping coal and nuclear plants is urgent because the electric grid would be less resilient without them. Resiliency refers to the ability of a power plant to recover after a power outage or disruption.

They also said subsidizing coal and nuclear could lead to higher costs for consumers. The Electricity Consumers Resource Council, which represents industrial manufacturers that are large consumers of electricity, has estimated it could cost consumers up to $3.8 billion annually.

Few Republicans have publicly spoken about the Energy Department proposal.

Sen. Lisa Murkowski (R-Alaska), chairman of the Senate Energy and Natural Resources Committee, told Bloomberg Tax Oct. 17 that she doesn’t believe the proposal is intended to prop up coal and nuclear plants. “The initiative is to review the resiliency of baseload power,” which is something she’s been asking for, she said.

“We’ve got a grid that’s in a kind of transition, if you will, and so making sure that we do have a level of resiliency out there is good,” she said. “The directive is to the FERC to review this. We’ll see what they come back with.”

The offices of two other Republicans on the Senate committee, Sens. John Barrasso (Wyoming) and Jim Risch (Idaho), did not respond to queries on the DOE proposal.— With assistance from Laura Davison.

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

For More Information

The letter is available at http://src.bna.com/trL.

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