By Rich Heidorn Jr.

WASHINGTON — In his first Capitol Hill appearance as FERC chairman, Kevin McIntyre said Tuesday that he still sees a place for coal and pledged the commission would maintain its independence as it conducts its new resiliency inquiry.

FERC’s resiliency docket (AD18-7) was mentioned frequently during a two-hour hearing at which the Senate Energy and Natural Resources Committee heard from McIntyre and the heads of PJM, ISO-NE, and NERC. The commission launched the initiative Jan. 8 after rejecting the Department of Energy’s Notice of Proposed Rulemaking (NOPR) for price supports.

Coming after a two-week cold spell that stressed grid operators in much of the country, the hearing gave coal-state senators disappointed over the commission’s rejection of the NOPR a chance to score points for their favorite fuel.

Coal Is Still Needed

Would the system have had enough power without the coal-fired generation that contributed during the cold spell, Sen. Joe Manchin (D-W.V.) asked McIntyre.

“I think in this recent weather event, we wouldn’t have seen any widespread outages absent coal,” McIntyre responded. “That said, coal was a key contributor. It wasn’t exempt from operational problems … but it was no question a key contributor. I share in your overall of view of [the] ‘all-of-the-above’” strategy.

“Coal needs to have a place?” Manchin continued.

“Absolutely,” McIntyre obliged.

PJM CEO Andy Ott said his system could not have met its load without coal, which represents about a third of its fuel mix — about even with nuclear and slightly above natural gas.

“We could not survive without natural gas. We could not survive without coal. We could not survive without nuclear,” Ott said later, in response to a question from Sen. John Barrasso (R-Wyo.). “We need them all.”

Charles A. Berardesco, who was making his first appearance before the committee since being named NERC’s interim CEO, expressed a similar view.

“NERC recommends policymakers and regulators should consider measures promoting fuel diversity and supplemental fuel sources as they evaluate electric system plans, consistent with policy objectives,” he said. “Additionally, regulators and policymakers should expedite licensing of new transmission and natural gas infrastructure to diversify and distribute risk.”

No to ‘All of the Above’

But ISO-NE CEO Gordon van Welie refused to take the “all of the above” pledge.

Van Welie acknowledged that coal — which Barrasso said provided 7% of New England’s power at the height of the coal snap — had contributed to the system’s performance.

But, he said, “the prospect of coal in New England is limited” because of the region’s desire to decarbonize. Only three coal generators took capacity obligations in its 2017 auction, one of which — the 383-MW Bridgeport Harbor Station — has announced its retirement.

“By definition, we have to reduce the amount of fossil fuel burned in the region,” van Welie said.

Van Welie also said the goal of fuel diversity is inconsistent with least-cost dispatch. “The term ‘fuel diversity’ is at odds with the idea of competitive wholesale markets, which is why you don’t hear us using the term ‘fuel diversity,’” he said. “We use the term ‘fuel security.’”

Allison Clements, president of energy policy firm Goodgrid, cited the conclusion of a National Academies of Sciences, Engineering and Medicine’s DOE-funded report, which she said “cautions about the difficulties of creating cost-effective and non-redundant rules for something as unpredictable and varied as resilience needs.” Clements participated in the study. (See DOE Panel Hears Results of Academies’ Resilience Study.)

“The idea that this new set of [renewable] resources coming on can’t be reliable is a false place to start,” she said.

“At this point nationally, only 7% of the resource mix is non-hydro renewables. … Every kind of resource has a set of benefits and issues … so narrowing the conversation to just gas vs. coal and LNG vs. new pipelines is an overly narrow view of the opportunity,” she said.

Clements was one of several panelists and senators who gave shout-outs to renewables, energy efficiency, demand response, and storage. But van Welie said none of those are likely to solve New England’s long-term fuel supply problem. (See Report: Fuel Security Key Risk for New England Grid.)

He also said, “Grid-level storage, in terms of today’s technologies, [is] not really useful in multi-day, multi-week events.”

Cantwell: Political Pressure, Ex Parte ‘Troubling’

Ranking member Sen. Maria Cantwell (D-Wash.) praised FERC for resisting what she called “undue political pressure” to provide coal and nuclear plants a “bailout” through the NOPR.

But she said she was disturbed by Commissioner Neil Chatterjee’s disclosure of an ex parte communication by an attorney lobbying for FirstEnergy’s request to transfer a struggling coal plant from its merchant unit to a regulated utility. (See McIntyre: Won’t Commit to Probe Leak to ‘Good Friend’.)

“The news was troubling to me because it said to me that there are those who are trying to influence FERC on a political aspect as opposed to the thorny economic issues,” she told McIntyre. “What do you plan to continue to do to ensure FERC is an independent agency?”

“I intend to do my utmost to ensure that FERC lives up to [its statutory] independence,” said McIntyre, who cited the commission’s unanimous vote to dismiss the DOE NOPR and open the new docket. “I’m so pleased that we were able to see a common path forward in … pursuing this very important issue.” (See FERC Rejects DOE Rule, Opens RTO ‘Resilience’ Inquiry.)

“So, you’ll make sure the politics stays out of it?” Cantwell asked.

“Thus far, honestly, it hasn’t been a problem,” McIntyre responded. “I have not personally felt any undue influence from anyone to affect my decisionmaking and I would expect that to continue.”

Chairwoman Lisa Murkowski (R-Alaska) pressed McIntyre on how quickly FERC will act in the new docket. She noted the commission still hasn’t completed work in the price formation docket it opened following the polar vortex in 2014. She said she had been raising concerns over the reliability impact of plant retirements for at least eight years.

The commission gave RTOs and ISOs 60 days to answer more than two dozen questions on their efforts to ensure resilience and other parties 30 days to file comments in response.

“When you say FERC is going to take prompt action, does this mean that it’s technical conferences or staff memos and whitepapers? What action can be expected?” Murkowski asked. “ … I would hope that FERC recognized that we need to move beyond technical conferences and more white papers, that we actually need to see that action.”

McIntyre said he shared Murkowski’s frustration with FERC’s pace before joining the commission.

“I cannot say now how much time” it will take FERC to act following the comments, he said. “But it’s something where I have declared it — and our order declares it — to be a matter of priority for the commission. Those are not words we utter very often.”

DOE Proposes National ‘Model’

Bruce J. Walker, assistant secretary in DOE’s Office of Electricity Delivery and Energy Reliability, told the panel DOE will be seeking funding to develop “a single North American energy infrastructure model of the ongoing resilience planning efforts at the local, state, and regional level, including interconnections that reach into Canada and Mexico.”

Walker said the goal of the model will be to fill “gaps” and “harmonize” inconsistencies in local, state, and regional resilience efforts.

“I understand that we currently do not have funds appropriated for such a task,” he said. “So, I am taking this opportunity to make my position clear: I believe building this resilience model should be the top priority for DOE’s Office of Electricity Delivery and Energy Reliability over the coming years.”