The new head of the nation’s top energy regulatory agency cited “national security” as a reason to keep uneconomic coal and nuclear power plants running, a refrain that has become increasingly common among Trump administration officials.
Neil Chatterjee, who took over as chairman of the Federal Energy Regulatory Commission (FERC) stated in a podcast released by the commission on Monday that he is committed to the resilience and reliability of the nation’s electric system. “These are essential to national security,” Chatterjee said. “And to that end, I believe baseload power should be recognized as an essential part of the fuel mix. I believe that generation, including our existing coal and nuclear fleet, need to be properly compensated to recognize the value they provide to the system.”
In the spring, Energy Secretary Rick Perry, speaking at a Bloomberg New Energy Finance (BNEF) conference in New York City, also cited national security as a possible reason that DOE would intervene in state energy planning that it concludes is a threat to baseload coal generation and nuclear power.
“This whole made-up theory that unecomomic baseload generation is somehow a) essential for reliability and b) a national security concern is a complete fabrication,” Tyson Slocum, director of Public Citizen’s Energy Program, told ThinkProgress. “There is no evidence that has been put forward before FERC or anywhere that provides any justification for that. This shows that Chairman Chatterjee is willing to engage in the politicization of FERC. This is troubling direction.”
Headquartered in Washington, D.C., FERC regulates the interstate transmission of natural gas, oil, and electricity and oversees the wholesale sale of electricity. The commission’s policies have played a major role in determining the extent to which renewable energy, energy storage, and energy efficiency are integrated into power markets.
A baseload power plant usually provides a continuous supply of electricity throughout the year and will only be turned off during periodic maintenance or upgrades. Many clean energy advocates, though, believe the changing dynamics of the electric power industry, including low natural gas prices, flat electricity demand, and the growth of renewables, have made the term “baseload” outdated.
“A host of studies now confirm that high levels of renewables like wind and solar can be reliably integrated into the system,” Miles Farmer, a clean energy attorney with the Natural Resources Defense Council, wrote in a blog post. “Study after study has concluded that no particular level of round-the-clock ‘baseload’ supply is necessary.”
The coal and nuclear industries have wanted FERC and regional grid operators that it oversees to enact rules that help keep their baseload power plants profitable. They have faced increased competition from natural gas power plants in recent years, making them less able to compete in the electric markets.
The mantra of the coal generation sector used to be that their plants provided grid reliability in an affordable manner. In recent years, though, coal generation costs have been undercut by natural gas and renewable energy plants. “Now their final card is national security,” Slocum said.
Perry was the first Trump administration official to use national security as a reason for the federal government to intervene in state and regional markets to support coal and nuclear plants. “Are there issues that are so important to the national security of this country that the federal government can intervene on a regulatory side?” Perry said at the BNEF conference, according to an E&E News report. “I’ll suggest to you that there are, from the standpoint of being able to have, and make sure that we maintain, a baseload on our grid is of national security.”
In April, Perry requested his staff at DOE conduct a study of the nation’s power grid to determine if the growth of renewable energy was leading to the premature retirement of coal and nuclear plants. A leaked draft version of the grid study currently in the works at DOE found that since 2002, “most baseload power plant retirements have been the victims of overcapacity and relatively high operating cost but often reflect the advanced age of the retiring plants.”
Factors like environmental regulations and renewable energy subsidies “played minor roles compared to the long-standing drop in electricity demand,” the draft study said.
Jim Marston, vice president of the Environmental Defense Fund’s Clean Energy program, contends Perry argued, without any evidence, that some state policies that encourage fuels other than coal could be a national security risk and should therefore be studied. “Suggesting that coal makes America safer may look like a clever tactic. The problem is, it just isn’t true,” he wrote in a a blog post.
Chatterjee is temporarily serving as FERC chairman while the commission awaits Senate confirmation of Kevin McIntrye, an industry attorney who is President Donald Trump’s choice for chairman. Chatterjee, a Republican, previously served as a senior energy policy adviser to Senate Majority Leader Mitch McConnell (R-KY), a position in which he spoke out against the Obama administration’s Clean Power Plan. Prior to serving as energy adviser to McConnell, he worked as a lobbyist for the National Rural Electric Cooperative Association and as an aide to former Rep. Deborah Pryce (R-OH).
According to the Energy and Policy Institute, a nonprofit research group, Chatterjee spearheaded the Republican push for Senate approval of the controversial Keystone XL pipeline, sought to undermine U.S. leadership on the Paris climate agreement, led McConnell’s campaign to convince states to oppose the Clean Power Plan, and worked to lift the ban on crude oil exports.
In the podcast, Chatterjee also stated he is looking forward to following Trump’s “charge to create jobs and stimulate economic growth through infrastructure.” But there is nothing in the Natural Gas Act that permits FERC to assess job creation or economic development, Slocum said. The commission has an obligation to ensure that the rates charged by owners of natural gas infrastructure are just and reasonable and that the proposed infrastructure project conform with the appropriate environmental review process.
With the right people appointed to the commission, Slocum had believed FERC could serve as a bulwark against the anti-climate action efforts of the Trump administration. Slocum now recognizes the commission is going in the opposite direction based on the comments of Chatterjee and Trump’s choices for other commissioners.
“FERC is going to try to ram through regressive and expensive policies that are going to try and stymie the renewable revolution that the markets have unleashed,” he said.