Coal and nuclear plants must be compensated properly for the reliability they bring to the electric grid, the newly appointed head of the nation’s grid watchdog said Monday.
“I believe that generation, including our existing coal and nuclear fleet, need to be properly compensated to recognize the value they provide to the system,” said Federal Energy Regulatory Commission Chairman Neil Chatterjee on the agency’s podcast.
Chatterjee was appointed to be the federal agency’s chairman last week after being confirmed by the Senate. The appointments of Chatterjee and Robert Powelson, another Republican commissioner, restored the quorum that the agency had lacked to be able to function for the last six months. He said the backlog of work at the commission has created a lot of “consternation” among lawmakers and others, and he means to tackle that as his first priority.
The backlog includes pipeline approvals and other oversight that the commission conducts for the nation’s energy infrastructure.
Grid reliability will be a top focus during his chairmanship, which will last until President Trump’s nominee to head the commission, Kevin McIntyre, is confirmed by the Senate in the fall.
“I’m also committed to the resilience and reliability of our electric system,” Chatterjee said. “These are essential to national security. And to that end, I believe baseload power [plants] should be recognized as an essential part of the fuel mix.” Baseload plants such as coal and nuclear provide electricity around the clock to meet demand.
The coal and nuclear industries want the commission and the regional grid operators that it oversees to enact rules that provide market-based incentives based on the attributes that their power plants provide to the grid. For coal plants, that would be a stable source of reliable electricity. For nuclear plants, it would be both their zero-emission attributes and reliability.
The coal and nuclear sectors have faced increased competition from natural gas power plants in recent years, making them less able to compete in the electric markets. Low natural gas prices have put pressure on a number of more expensive energy resources because the markets that FERC oversees promote the lowest cost resource.
“You know, I’m a Kentucky native. I’ve seen firsthand throughout my life how important the contribution coal makes to an affordable and reliable electric system,” said Chatterjee, who served as chief energy adviser to Senate Majority Leader Mitch McConnell, R-Ky., before joining FERC.
“Last year, coal provided over 80 percent, 80 percent, of the electricity in Kentucky,” he said. “As a nation we need to ensure that coal, along with gas and renewables, continues to be part of our diverse fuel mix. I’m also looking forward to following the president’s charge to create jobs and stimulate economic growth through infrastructure.”
Chatterjee said he believes FERC will play a major role in Trump’s infrastructure plan. “I believe working through the backlog, especially evaluating the infrastructure projects before the commission, really could help spur economic development,” he said.
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