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FERC chair seeks ‘lifeline’ for at-risk power plants

9 Nov 2017, 7.52 pm GMT

FERC chair seeks ‘lifeline' for at-risk power plants

Washington, 9 November (Argus) — Coal and nuclear plants at risk of retiring should qualify for temporary support while the Federal Energy Regulatory Commission (FERC) takes a deeper look at grid resiliency, agency chairman Neil Chatterjee says.

Chatterjee says he wants an "interim solution to keep plants afloat" while the agency conducts a longer-term review of how to improve the resiliency of the grid. FERC started looking into that issue in response to US energy secretary Rick Perry's proposal to give coal and nuclear power plants that have a 90-day fuel supply special payments for their alleged benefits to the grid.

"I want a no regrets approach to this," Chatterjee told reporters today at a S&P Global Platts' event. "What I do not want to have is plants shut down while we are doing this longer-term analysis."

The details of the interim solution are uncertain as FERC tries to hit an 11 December deadline to act on Perry's proposal. Chatterjee said the solution would ideally prevent most at-risk plants from retiring but not affect the competitive process of dispatching power plants to serve load. It remains unclear which facilities would qualify for interim support, or what criteria FERC would use to determine eligibility.

"We need to figure out, how do we take that interim step, how do we cast a lifeline to some of these resources so they can stay afloat during the longer-term analysis," he said.

Chatterjee said he was trying to convince his colleagues to support the interim solution, an effort that may be difficult to achieve. FERC's other two members, Robert Powelson and Cheryl LaFleur, have hinted at concerns that adopting Perry's proposal might "blow up" power markets. And huge swaths of industry on 8 November filed a second round of criticisms against the proposal, while some coal and nuclear groups came to its defense.

FERC's response will be complicated by a coming leadership shakeup. Kevin McIntyre, who is set to become chairman once he is sworn in, has said the agency should be "fuel neutral" but has not weighed in on the grid resiliency proposal. Richard Glick, a Democrat, will also soon be sworn in. Assuming they are sworn in within the next month, FERC will need at least three votes to take any final action.

Chatterjee was critical of a push from industry groups to further study grid resiliency before taking any definitive action. He also echoed comments from supporters of Perry's proposal, such as FirstEnergy and Murray Energy, that the time has come for FERC to act.

"The worst outcome would be some kind of mealy-mouthed, does-not-accomplish-anything study that just further punts this down the road," he said. "If it were up to me, I want to either find a solution and solve this question, or end it."

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