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FirstEnergy Seeks Emergency Federal Order To Avert Shutdown Of Nuclear, Coal Power Plants

Citing a serious threat to the stability of the electric grid, FirstEnergy Solutions Corp. Thursday called on U.S. Energy Secretary Rick Perry to issue an emergency order directing PJM Interconnection, the regional transmission organization, to immediately begin negotiations to secure the long-term capacity of certain nuclear and coal-fired plants in the region and to compensate their owners "for the full benefits they provide to energy markets and the public at large, including fuel security and diversity."

FES filed an application for an order under Section 202c of the Federal Power Act, which gives the Secretary of Energy extraordinary powers to confront such emergencies.

The threat, FES said, is caused by the premature retirement of plants that have many years of useful life but cannot operate profitably under current market conditions. The retirement of such "at-risk" plants is accelerating, the company said.

On March 28, 2018, for example, FES notified PJM and the federal Nuclear Regulatory Commission that its two nuclear plants in Ohio and one in Pennsylvania, with combined capacity of 4,048 megawatts, would be deactivated over the next three years.

The U.S. Department of Energy noted in a new study that vulnerability of the grid was vividly demonstrated this past winter when a cold snap gripped the East from December 27 through January 8, causing a surge in demand for natural gas for home heating, which, along with pipeline problems and price spikes, reduced its availability for power generation.

Had nuclear and coal-fired not outperformed during that period, PJM and the Northeast grid would likely have faced outages and other reliability problems, the agency said.

Coal and nuclear are uniquely capable of coping with natural and man-made disruptions to power generation fuel supply because both can store fuel onsite for more than a year, unlike natural gas or alternative energy sources.

Yet PJM and the Federal Energy Regulatory Commission fail to acknowledge the critical extra value that those advantages provide to the reliability of the grid and the security of the nation.

"PJM has demonstrated little urgency to remedy this problem any time soon – so immediate action by the Secretary is needed to alleviate the present emergency," FES President Donald R. Schneider said. Continued inaction could lead to "significant, negative outcomes for the approximately 65 million people living and working within the PJM footprint," he said.

"Such quick and decisive intervention is necessary to avoid a crisis point where such baseload generation will cease to exist in competitive markets, and to ensure that nuclear and coal-fired generators operating within PJM are compensated fairly for their costs and the benefits that they provide such that they can continue to operate and ensure a dependable, affordable, safe, secure, and clean supply of electricity," Schneider concluded.

Reaction

Associated Petroleum Industries, representing the natural gas industry, issued this statement in reaction to FirstEnergy’s announcement calling on FirstEnergy to stop misleading the public surrounding the future of its power plants in Ohio and Pennsylvania--

"FirstEnergy needs to stop misleading the public and government officials about the status of its power plants in Ohio and Pennsylvania," said API Market Development Group Director Todd Snitchler. "FirstEnergy's latest attempt to spread a false narrative surrounding the reliability of the electric grid is nothing more than a ruse that will force Main Street consumers to pay higher prices.

"As FirstEnergy has said repeatedly, it plans to exit the merchant generation business and retire or deactivate some of its power plants. In fact, these announced retirements are not slated to occur for another 2-3 years. Further, its Davis-Besse nuclear plant in Ohio was just refueled.

"FirstEnergy's claim that the electric grid would be in immediate danger with these power plant retirements is simply untrue. According to PJM, we have more than enough electricity in the grid to handle these retirements thanks to additional natural gas plants in the region.

"For FirstEnergy to cry wolf on the issue of grid reliability is irresponsible and is the company's latest attempt to force consumers to pay for a bailout. PJM is responsible for the reliability of the grid and if there is an emergency, PJM already has the tools to respond."

The PJM Interconnection was quoted by the Washington Examiner as saying, “This is not an issue of reliability. There is no immediate emergency. Diversity of the fuel supply is important, but the PJM system has adequate power supplies and healthy reserves in operation today, and resources are more diverse than they have ever been. Nothing we have seen to date indicates that an emergency would result from the generator retirements."

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