U.S. Energy Regulator Lays Out Plan to Keep At-Risk Coal Online

  • FERC chairman seeks to adopt ‘interim’ solution by Dec. 11
  • Commission has met with FirstEnergy CEO to discuss plans

FERC Chairman Says He Doesn't Want to Disrupt Gas Markets

FirstEnergy Corp.’s efforts to save its ailing coal plants are gaining traction with the top U.S. energy regulator.

Neil Chatterjee, chairman of the Federal Energy Regulatory Commission, said Thursday he’s working on a short-term plan to keep at-risk coal and nuclear generators online. The plan would give his commission more time to evaluate Energy Secretary Rick Perry’s sweeping proposal to compensate certain plants that store fuel on-site.

"What I don’t want to have is plants shut down while we’re doing this longer-term analysis, so we need an interim step to keep them afloat,” Chatterjee said at an S&P Global Platts Energy Podium event in Washington. 

Chatterjee said he expects to release his plan to rescue plants by Dec. 11, along with a framework for completing a broader rule that addresses Perry’s proposal. For now, the commission’s staff is working on a legal means of saving as many "resilient" plants as possible, Chatterjee said.

"I don’t know that we can get everybody in the lifeboat," Chatterjee said, noting that he still has to win the support of a majority of his colleagues on the five-seat panel. 

FERC chairman Neil Chatterjee discusses his plan to keep at-risk power plants online.

(Source: Bloomberg)


The "interim solution" touted by Chatterjee echoes a proposal devised by utility FirstEnergy, which has urged the commission to take quick action to secure extra compensation for so-called baseload plants.

"This issue is too important, too pressing, and too critical to the nation’s security and grid reliability to leave to the never-ending vicissitudes of" the stakeholder process, the company said in comments to the agency.

Read More: Even Coal Generators Are Lukewarm on Trump’s Plan to Help Them

On Thursday, Chatterjee said he has met with FirstEnergy Corp CEO Chuck Jones to discuss the company’s "thoughtful" proposal to keep coal and nuclear plants online.

"We met with the FirstEnergy team, with our team at the commission, to really kick the tires on what they proposed and challenge them on some of what they had put forward," Chatterjee said. 

Under FirstEnergy’s plan, plants designated as "resilient" would receive a monthly payment from grid operators that fully offsets operation costs and includes a "fair return on equity."

The company offered some "constructive solutions," Chatterjee said in an interview at Bloomberg’s Washington bureau.

Reached by phone, FirstEnergy spokeswoman Jennifer Young declined to comment.

Leadership Change

Chatterjee said that the rulemaking process won’t be disrupted when Kevin McIntyre, President Donald Trump’s first pick to head the commission, is officially sworn in later this month. The commission is also waiting for a new Democratic commissioner, Richard Glick, to be sworn in.

Chatterjee also acknowledged that he would need a majority of the commissioners to vote for his plan in order for it to be approved. The agency’s other sitting commissioners, Cheryl LaFleur and Robert Powelson, have raised concerns that Perry’s proposal would “blow up” energy markets.

— With assistance by Jim Polson

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