Tuesday, December 12, 2017

Chatterjee: ‘We’ve Moved Past’ DOE NOPR

Gavels Last FERC Open Meeting as Chair

By Michael Brooks

WASHINGTON — FERC Chairman Neil Chatterjee on Thursday defended his call for interim price supports for coal and nuclear plants as a response to Energy Secretary Rick Perry’s grid resiliency proposal.

In remarks to reporters after FERC’s open meeting, Chatterjee expressed frustration with the reaction his plan has received from industry stakeholders. He said his critics were still debating the department’s Notice of Proposed Rulemaking — which calls for RTOs and ISOs with energy and capacity markets to pay generators with 90-day supplies of onsite fuel their full operating costs — and not his idea to provide a “lifeboat” for baseload plants while FERC considers the NOPR.

FERC ISO-NE Cheryl LaFleur Neil Chatterjee DOE NOPR

Chatterjee | © RTO Insider

Chatterjee was asked about discussions regarding the NOPR at the National Association of Regulatory Utility Commissioners’ Annual Meeting in Baltimore this week. “This is part of the confusion and why people are having the outsized reactions that they’re having,” he responded. “That entire debate at NARUC was predicated on the NOPR that Perry has submitted. What I’m sitting here talking about is what we’ve been working on for an interim step coupled with our own long-term rulemaking.” (See DOE, Pugliese Press ‘Baseload’ Rescue at NARUC.)

He said he was “cognizant” of the criticisms the NOPR has received, but that “people are still debating the NOPR as it was submitted to us. And what I’m trying to say is we’ve moved past that and we’re moving towards a constructive solution that still answers the questions that Secretary Perry asked in the NOPR in a way that does not distort markets and is legally defensible.”

Chatterjee revealed he was working on an interim solution last week. (See Chatterjee to Push Interim ‘Lifeboat’ for Coal, Nukes.)

He said he is contemplating proposing a “show cause” order requiring grid operators to compensate resources that may provide resilience benefits and are at risk of retirement as an interim measure while the commission conducts a longer-term rulemaking.

Chatterjee called on his critics to “calm down,” attributing their “hyperbolic” reaction to a lack of understanding of his plan.

“This is a very careful, thought-out approach that I think that when people have the opportunity to calmly look at it, there’s nothing controversial or radical.”

Chatterjee said it was “befuddling” that anyone would find it controversial for the commission to “carefully and thoughtfully” examine the long-term implications of not having coal and nuclear as part of the country’s generation mix. He emphasized repeatedly that his “lifeboat” plan was a work in progress but that it would be ready to act on by the DOE-stipulated Dec. 11 due date.

“We’re still fleshing it out,” he said. “It’s incredibly complex; I want to get it right, and as soon as it’s right and it’s ready and I’ve had time to review with my colleagues, I’ll discuss it in far greater detail at that time.”

Chatterjee said that in working on his idea, he has been trying to ameliorate concerns raised by Commissioners Cheryl LaFleur and Robert Powelson about the DOE NOPR.

“I’m hoping that in fleshing this out, [Chatterjee and his staff] will answer the questions and concerns my colleagues had and have a product that we’ll be able to build a consensus around,” he said.

Chatterjee has previously stated that he has not discussed his idea with the other commissioners.

He also said that he has not reviewed the price-formation proposal PJM released Wednesday — a longer version of what the RTO filed at FERC in comments on the NOPR. (See Rule Changes Could Spur $1.4B Jump in PJM Market Costs.)

“It’s certainly in line with the conversation that we’re having,” Chatterjee said. “It seems like something that we could look to for a longer-term solution. … But I still remain committed to doing something in the short term, in the interim, while we work towards some of the long-term issues that PJM acknowledged we have.”

A Farewell Address, of Sorts

In his remarks opening Thursday’s meeting, Chatterjee highlighted what the commission has done since he became chairman in August, including changes in hydropower licensing, proposals for improved cybersecurity and approval of 8 Bcfd of new natural gas pipeline capacity. (See FERC Sets 40-Year Term for Hydro Licenses and FERC Seeks Cyber Controls on Portable Devices; Sets GMD Plans.)
He said the DOE NOPR would be “the most significant issue we will face during my time on the commission.”

Thursday’s meeting was Chatterjee’s last as chair, with incoming Chair Kevin McIntyre set to join FERC “any day now.” McIntyre, along with Democratic Senate aide Richard Glick, were confirmed by the Senate two weeks ago and are awaiting their signed commissions from President Trump.

Heaping praise on FERC staff, Chatterjee also touted the 344 orders that the commission has voted on since the restoration of its quorum. He said there were only “a few odds and ends” left before the commission had eliminated the backlog of filings from its time without a quorum.

“I think it’s safe to say that FERC is working harder than ever for the American people,” Chatterjee said. “It’s been my distinct honor to be the one at the helm overseeing the accomplishments I’ve outlined today. I’m humbled by the experience and grateful to President Trump for entrusting me with this responsibility.”

He closed out the meeting by noting the “unorthodox” nature of his tenure: beginning as chair before going to regular commissioner.

“Doing it in reverse, I actually hope that the experience that I’ve had will help me be a more effective commissioner going forward,” he said, receiving applause after adjourning the meeting.

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