The Trump administration’s nascent, second-generation plan to bail out uncompetitive coal and nuclear plants, bypassing the Federal Energy Regulatory Commission, got a decided thumbs down from the Republican-dominated FERC and several Republican Senators on Tuesday. Greentech Media commented, “Outside of politicians from coal states, the DOE’s plan doesn’t have many supporters in Washington.”
The Senate Energy and Natural Resources Committee took a look at the draft Department of Energy plan to use a declaration of threats to national security and the national electric grid if coal and nuke plants aren’t available, regardless of cost. The plan would use provisions from the Federal Power Act and the 1950 Defense Production Act to go around FERC and install an undefined two-year regime to keep the coal and nuclear units in the generation queue in competitive wholesale markets.
At the committee meeting, the five FERC commissioners, four of them Trump appointees, rebuffed the administration’s claim of a threat to national security with resounding silence. POWER magazine reported, “Sen. Martin Heinrich (D-N.M.) directly asked the commissioners: “Do any of you believe that in the wholesale power markets we are facing an actual national security emergency at the moment? Commissioner Cheryl LaFleur, the agency’s only holdover from the Obama administration, said: ‘I do not.’ Heinrich then asked: ‘Would anyone answer that with a yes?’” No response.
Sen. Lisa Murkowski (R-Alaska), the committee chair, expressed skepticism about the latest DOE plan. (FERC at the beginning of the year rejected an earlier DOE proposal to keep the uneconomic plants running.) She said closings of nuclear and coal plants had “not reached the point where the quality of electric service [has] been visibly compromised.” Murkowski added, “In my view, [FERC] should be pointing the way on policy improvements that address grid vulnerabilities, while reaffirming our commitment to competition in wholesale power markets. We must increase the light and lower the heat in policy debates.”
Many FERC legal practitioners are dismissive of the DOE draft. Rabeha Kamaluddin, a partner in the international law firm Dorsey & Whitney, says, “Although both DPA and Section 202(c) of the Federal Power Act provide for broad statutory powers, the circumstances in which such powers have been invoked are limited– one in wartime (DPA) and the other where there was an imminent threat to grid reliability (e.g., California blackout, Hurricane Katrina, among others). Precedent shows that in each instance in which the DOE has exercised its authority under Section 202(c), there was an imminent threat to the power grid. In order to not frustrate the purposes of these statutes, and justify the exercise of such authority, there should be some reasonable evidence that the coal/nuclear plant closings would pose an imminent threat to the power grid, or a threat to national security.”
In making its case for national security interests, the draft administration plan assailed gas and renewable generation for not having onsite fuel storage (although gas has plentiful off-site storage) and raised the issue of cybersecurity threats to the electric grid and the natural gas pipeline infrastructure. The DOE draft said that the grid and gas pipelines face increasing risk of “high-impact events that could result in significant harm to human life, the economy, the environment, and national security.” That raised hackles at FERC, which, working with the North American Electric Reliability Corp., has a robust program to address electric grid cyber vulnerabilities.
That’s not so when it comes to gas pipelines. Writing in Axios, Republican FERC Commissioner Neil Chatterjee and Democratic Commissioner Richard Glick, both Trump appointees, noted that the federal government’s oversight of gas pipeline cybersecurity risks is weak. The issue comes under the authority of the Department of Homeland Security’s Transportation Security Administration. That’s the organization that spends hundreds of millions of dollars with thousands of staff assuring that airline passengers aren’t a terrorist threat.
Chatterjee and Glick noted that TSA has “just 6 full-time employees tasked with securing the more than 2.7 million miles of natural gas, oil and hazardous liquid pipelines that traverse the country. Moreover, despite having the authority to enforce mandatory cybersecurity standards, the TSA relies on voluntary ones.”
A better approach to gas pipeline security, say the two FERC commissioners, would be for Congress to “vest responsibility for pipeline security with an agency that fully comprehends the energy sector and has sufficient resources to address this growing threat. The Department of Energy (DOE) could be an appropriate choice: It is the Sector-Specific Agency for energy security and recently created its own cybersecurity office.”
— Kennedy Maize