Dive Brief:
- The Department of Energy "would never" use its emergency authority under the Federal Power Act (FPA) to keep uneconomic generators online, Assistant DOE Secretary Bruce Walker said Tuesday.
- This month, Bloomberg reported DOE is considering an order under 202(c) of the FPA to keep coal plants online that otherwise may retire due to market forces. But Walker, whose office would typically issue such an order, said DOE "would never use a 202 [order] to stave off an economic issue."
- Walker said DOE is also working with other federal agencies and regional neighbors to construct a reliability and resilience model for North American energy infrastructure. That model aims to help identify weaknesses in the power and gas sectors and drive investment and operations decisions to address them.
Dive Insight:
The Federal Power Act gives the Secretary of Energy the authority to issue must-run orders to individual plants in the case of an emergency, exempting them from emissions regulations and insulating them from market forces.
The rule is not often used, but was deployed by Secretary of Energy Rick Perry in April 2017 to keep a large coal plant online in the Southwest Power Pool until other generators that could provide reliability services came online. Earlier orders from the Trump administration targeted a dam in Oklahoma and two Dominion Energy coal plants in Virginia.
In August, Perry reportedly denied a request from coal miner Murray Energy to deploy the emergency authority for uneconomic coal plants and prevent owners from shutting any down. DOE instead submitted a proposed rule at the Federal Energy Regulatory Commission in September that would have provided cost recovery for many coal and nuclear generators.
FERC rejected that proposal last month, and Bloomberg subsequently reported that some at DOE were still considering a 202 order for some plants — particularly those owned by Ohio-based utility FirstEnergy, a key supporter of the DOE's proposed rule at FERC.
But Walker, head of the Office of Electricity Delivery and Energy Reliability, said neither he nor Perry are considering such an order.
"We would never use a 202 to stave off an economic issue," he said. "That's not what it's for."
DOE has, however, issued 202 orders based on the need to comply with federal emissions standards. The SPP plant that got an order last April was not compliant with the EPA's Mercury and Air Toxics Standards, a regulation that affects the FirstEnergy plants also slated for shutdown.
Walker did not weigh in on those issues during his appearance at the DOE's Electricity Advisory Committee (EAC) meeting on Tuesday, but reiterated repeatedly that a 202 order is not under consideration today.
"Since I would be the one writing it, I can tell you it's never come to my attention, nobody's talked about it, nobody in my department is doing anything with it," he said. "It does not exist."
During the EAC meeting, Walker told the group of power sector executives that his department is working with FERC and the North American Electric Reliability Corporation to devise a new modeling tool for grid reliability and resilience across North America.
Today, individual utilities use models of their grids to identify weak points and guide investments. But, Walker said, no model exists for the bulk power system that can model the interdependencies between different grid operators, balancing authorities and other sectors, like natural gas delivery.
A "multi-year effort" among DOE, FERC and NERC will aim to change that, designing an all-in-one model that will allow system planners to perform studies like "n minus one, minus one," Walker said. Such studies allow individual utilities to model how their systems would respond to the loss of multiple pieces of equipment.
"This model will enable us to make very well informed investment decisions, O&M decisions, and physical and cybersecurity investment decisions to protect the most important critical infrastructure around the U.S." Walker said.
