Andrew Ott, CEO of PJM, which operates the largest power market in America, cautioned the Trump administration on Thursday not to use emergency power to keep coal and nuclear plants alive, urging the president to leave analysis and solutions to the experts.
"Instead of the federal government stepping in, allow us to complete our analysis,” he said at a hearing convened by Senate Energy and Natural Resources Committee.
Ott was referring to a study PJM is conducting, due Nov. 1, of the resilience of the power grid in the area it covers, representing 65 million people in 13 states from Illinois to Virginia.
He said that PJM’s analysis shows that coal and nuclear closures in the region he covers that are scheduled for 2021 and 2022 can happen without causing a problem to the grid.
He was responding to a question from Sen. Joe Manchin, D-W.Va., who supports the Trump administration taking action because of his state’s reliance on coal, and uses every opportunity he can to blow the horn for it.
“If these retirements accelerate, I continue to believe it will jeopardize the security of our nation,” Manchin said.
But Ott told reporters that executive action from the Trump administration would be “very inefficient.”
The Trump administration is considering requiring federally overseen grid operators such as PJM to buy electricity from select “critical” coal and nuclear plants for two years, using emergency authority that is normally meant for exceptional crises such as natural disasters, war or a terrorist attack.
“Targeting specific payments to specific units is a very inefficient answer,” Ott told reporters after the hearing.
PJM has previously said its grid is "more reliable than ever" and that any federal intervention “would be damaging to the markets and therefore costly to consumers” by raising electricity prices.
It has offered a proposal, subject to review by the Federal Energy Regulatory Commission, that would change how power providers are compensated as the grid transitions to more natural gas and renewables, rewarding sources that can provide reliable and resilient service.
PJM prefers a different approach that would be market-neutral, in which all power sources, not just coal and nuclear, could receive enhanced payments, based on certain characteristics, such as the ability of a plant to store fuel on-site.
“The best thing, the most efficient thing is to define the characteristic and then say, ‘OK, I will pay for it, and the best resource wins.' That is more efficient and that’s competition. Everybody wins," Ott said.
FERC, a panel of independent energy regulators, last year rejected a previous version of the Trump administration’s plan to provide special payments to uneconomic coal and nuclear plants that could store 90 days of fuel on-site. FERC, in rejecting the plan, directed regional transmission operators such as PJM to submit information on resilience challenges in their markets.
The panel has not yet acted on that information, to the dismay of Ott.
“Certainly, having a full FERC will probably help move some things, but really, my desire would be for FERC to get the message we do need their assistance,” Ott told reporters. “We just feel they need to move forward. It’s important for the nation.”