Advanced Energy Economy Urges U.S. Dept. of Energy to Reject Request for Emergency Support of Coal, Nuclear Plants

WASHINGTON, April 24, 2018 – Today, national business group Advanced Energy Economy (AEE) announced it has submitted comments to the U.S. Department of Energy ("DOE"), requesting a rejection of FirstEnergy Solution's March 29 proposal for a 202(c) order. FirstEnergy Solutions filed a request with DOE seeking a 202(c) order that would provide emergency support for a wide range of coal and nuclear plants across the PJM Interconnection ("PJM"). 

AEE's comments emphasize the lack of evidence put forward by FirstEnergy Solutions that there is a national emergency requiring DOE to intervene by issuing a 202(c) order. 

“The proposal amounts to a multi-billion-dollar tax on businesses and households in PJM to bail out uncompetitive power plants,” said Malcolm Woolf, senior vice president of policy for AEE. “The region is blessed with ample excess electricity generation supply, as attested to by the grid operator, PJM. As such, there is no imminent shortfall that would justify invoking the ‘emergency authority’ of the Federal Power Act, the ‘national security’ provisions of the Defense Authorization Act, or any other authority for emergency action. The only beneficiaries of the requested order would be the owners of failing power plants, while competitive wholesale markets would be upended and American families and businesses would be forced to pay billions in costs that are not needed to keep the lights on.”

Section 202(c) of the Federal Power Act was created in response to the 1970s oil embargo that provides the DOE with authority to intervene in the electricity industry during an emergency that threatens national security; past use of 202(c) orders included responses to naturally occurring events such as hurricanes.  

In its comments to Secretary Perry, AEE argued that using the section 202(c) authority in this manner would “be unlawful because there is no Imminent reliability or resilience emergency requiring immediate action”; that it would “be Inconsistent with DOE’s Prior Use of Section 202(c)”; and it would “threaten to unravel the competitive wholesale markets that Congress and FERC have sought to foster”; and, it “would undermine energy technology innovation in those markets.”

Background Material

• AEE Comments Urging DOE Reject Request (Letter to Sec. Perry)
• March 29 AEE Statement: No Need for Federal Emergency Support of Unprofitable Coal, Nuclear Plants
• Analysis Group report, Electricity Markets, Reliability, and the Evolving U.S. Power System, finds market forces – primarily low-cost natural gas and flat demand for electricity – are causing coal and nuclear power plants to retire, not state and federal policies supporting renewable energy development. The report finds that the changing resource mix poses no threat to reliability of the nation’s power system. 
• All five FERC Commissioners testified at the House energy subcommittee oversight hearing last week, noting strong reliability of the system, their continued review of reliability and resilience issues, and registering some concerns about cybersecurity.
• Grid operators for all regions testified before a House energy subcommittee hearing about grid reliability last July, noting record reliability performance, how they have adapted to evolving energy mix, and concerns mainly about cybersecurity threats.
• AEE Institute report, Changing the Power Grid for the Better, shows today’s electric generation mix is more diverse than ever; low-priced gas is primarily driving the change in resources, followed by flat load growth and competition from renewables; ERCOT and PJM experience shows reliable grid management with high degree of variable renewables even in extreme conditions.
• AEE report, Bailout Without Benefit: DOE's Proposed Rule Would Drive Up Cost, Do Nothing to Strengthen the Grid, summarizes arguments against the proposed rule that would have subsidized coal and nuclear plants with 90-day onsite fuel supply.
• FERC denied DOE's proposed grid reliability rule and opened new inquiry, now in process, on grid reliability definition and issues. RTO's/ISO's filed their comments March 9 and other stakeholder comments are due May 9 (per an extension granted last week).
• This action follows a string of efforts to support coal and nuclear plants since early last year. For an overview see AEE blog posts here, here, and here.

About Advanced Energy Economy
Advanced Energy Economy is a national association of businesses that are making the energy we use secure, clean, and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. AEE and its state and regional partner organizations are active in 27 states across the country, representing more than 1,000 companies and organizations in the advanced energy industry. Learn more at www.aee.net and track our latest news @AEEnet.