Eight former US Federal Energy Regulatory Commission members soundly rebuked, in an Oct. 19 comment, a proposal supposedly designed to make electric power systems more resilient. "The published proposal in this docket would be a significant step backward from the commission's long and bipartisan evolution to transparent, open, competitive wholesale markets," they warned.
The proposal came in response to US Energy Sec. Rick Perry's formal Sept. 29 request for FERC to find ways to make power distribution systems more resilient and reliable. It included finding ways for coal-fired and nuclear power plants, which the proposal called "fuel-secure generation," to recover their costs and stay in operation.
The eight former commissioners-Elizabeth A. Moler, James J. Hoecker, Donald F. Santa Jr., Linda Kay Breathitt, Pat Wood III, Nora M. Brownell, Joseph T. Kelliher, and Jon Wellinghoff-noted they were appointed to the commission by every US president since Ronald Reagan.
They pointed out that FERC's mission is to "assist consumers in obtaining reliable, efficient, and sustainable energy services at a reasonable cost through appropriate regulatory and market means." For 25 years, FERC has tried to encourage power supply competition to benefit customers, enhance reliability, and facilitate construction of the necessary transportation and distribution systems, the former commissioners said.
"[FERC] has always been fuel-agnostic, refraining from favoring one fuel over another," they observed. "We acknowledge that the markets today are not pristine; various kinds of external supports for resources still exist."
The former commissioners cited congressionally approved federal tax subsidies for wind and solar generation, as well as less overt benefits for oil, gas, and coal extraction. The states of New York and Illinois also moved recently into this area with their adoption of subsidies for certain nuclear plants, they added.
'Not the way to go'
"But one step the commission has never taken is to create or authorize on its own the kind of subsidy proposed here," the commissioners said. "We know there is always more to do to make wholesale markets more open, more transparent, and more efficient; but moving backward is not the way to go."
They encouraged FERC to use the opportunity created by Perry's order to identify attributes of the current competitive market system that need to be improved, to crisply define then and either modify the current published proposal or initiate regional proceedings to examine resilience issues and consider the need for changing market rules.
"Accordingly, we urge you not to move forward with the published proposal, and instead address the issues of power system reliability and resiliency consistent with the commission's long history, and in the transparent, bipartisan, policy-centered manner for which [it] has long been respected," they said.
About the Author
Nick Snow
NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.