Energy industry joins forces in sending letter on grid reliability to Congress

Published on September 14, 2017 by Kevin Randolph


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Trade groups representing a wide range of energy sectors penned a joint letter to Congress on Thursday that largely expressed agreement with the findings of a recent U.S. Department of Energy report on electricity markets, which highlighted the need for a diverse energy mix in order to provide reliable and electricity to customers.

The group of industry representatives from the electric, petroleum, nuclear, wind and hydropower sectors, among others, sent the letter to members of the U.S. House of Representatives Energy and Commerce Committee.

The letter said that the trade organizations agreed with several findings and recommendations of the DOE Staff Report to the Secretary on Electricity Markets and Reliability, which Energy Secretary Rick Perry ordered in April to assess the impact of federal policies on energy markets and the early retirement of coal and nuclear plants.

The report found that low natural gas prices are the primary drivers of early plant retirements and cited slow energy demand growth and increasing use of renewable resources as lesser contributors.

The energy trade associations praised the DOE for examining the factors that can improve the reliability and resiliency of the energy grid. “This study underscores that diversity of resources and technologies—and, thereby, a diversity of services—is needed to provide reliable and affordable electricity for customers,” the letter said.

“Competitive electricity market rules should promote a diverse portfolio, which includes traditional, renewable, and emerging energy sources, through fuel neutral policies that recognize the role that all generation resources can play in maintaining reliability, resiliency, and resource adequacy,” the letter stated.

The energy groups also stressed the importance of the markets needing to accommodate the planning and procurement decision of various business models, such as electric cooperatives, public power utilities and investor-owned electric utilities.

The energy organizations sent the letter to Energy and Commerce Committee Chairman Greg Walden (R-OR), Ranking Member Frank Pallone (D-NJ), U.S. Reps. Fred Upton (R-MI), chairman of the Energy Subcommittee, and Bobby Rush (D-IL), ranking member of the subcommittee.

The letter also noted the DOE study’s recommendation to the Federal Energy Regulatory Commission (FERC) to address wholesale electric price formation and the valuation of essential reliability services. These price formations should also include consumer protections, the letter pointed out.

“The undersigned energy trade associations look forward to working together with FERC, the regional transmission operators, and the independent system operators that run these wholesale electric markets, and with all stakeholders, on these important issues and other market concerns,” the letter said.

Neil Chatterjee, the chairman of FERC, discussed the study and FERC’s role in ensuring grid reliability on Thursday at a House Energy and Commerce Committee hearing entitled “Powering America: Defining Reliability in a Transforming Electricity Industry.”

“I will work with my colleagues and FERC staff to analyze the recommendations and areas for further study identified in the report, Chatterjee said in his testimony. “Certainly FERC’s efforts in these areas will continue to involve cross-sector, interagency and public-private coordination. Working with our federal partners, state colleagues, industry and other stakeholders, FERC will continue to seek ways to ensure the reliability and resiliency of the electric grid.”

The industry groups also noted that they agreed with the report’s recommendation that DOE and other relevant agencies accelerate and reduce costs associated with the licensing, relicensing, certificating, and permitting of resources and infrastructure needed for electric reliability.

The 14 energy trade groups that signed the letter include: Edison Electric Institute President Thomas Kuhn, American Public Power Association President and CEO Sue Kelly, American Petroleum Institute President and CEO Jack Gerard, Nuclear Energy Institute President and CEO Maria Korsnick, National Rural Electric Cooperative Association CEO Jim Matheson, National Mining Association President and CEO Hal Quinn, U.S. Chamber of Commerce Global Energy Institute President and CEO Karen A. Harbert, American Coalition for Clean Coal Electricity President & CEO Paul Bailey, National Hydropower Association Executive Director Linda Church Ciocci, Natural Gas Supply Association President and CEO Dena Wiggins, Electric Power Supply Association President and CEO John E. Shelk, American Wind Energy Association CEO Tom Kiernan, Interstate Natural Gas Association of America President and CEO Donald F. Santa, Jr. and American Gas Association President and CEO Dave McCurdy.