FERC Chairman Backs Compensation for Baseload Sources

The interim chairman of the Federal Energy Regulatory Commission says coal and nuclear generation should be “properly compensated” in recognition of the resilience and reliability they provide to the grid.

Neil Chatterjee

Neil Chatterjee

"I believe baseload power should be recognized as an essential part of the fuel mix," Neil Chatterjee said on the agency's "Open Access" podcast on Aug. 14. "I believe that generation, including our existing coal and nuclear fleets, need to be properly compensated to recognize the value they provide to the system."

Chatterjee, a former aide to Senate Majority Leader Mitch McConnell, R-Ky., did not elaborate on how generators might be compensated.

However, the Kentucky native said he is convinced coal generation is essential to grid reliability and national security.

"Last year, coal provided over 80 percent…of the electricity in Kentucky. As a nation, we need to ensure that coal, along with gas and renewables, continues to be part of our diverse fuel mix," he said.

Coal and nuclear generators have expressed concern that electricity prices in power markets fail to reflect the attributes they provide to consumers and the grid, including their role as a source of continuous, reliable electricity.

Earlier this year, NRECA and Old Dominion Electric Cooperative participated in a FERC technical conference on wholesale energy and capacity market design, with a focus on ensuring sufficient revenues for certain types of generation.

However, FERC's proceedings have been stalled for much of 2017 because of the lack of a quorum. That changed Aug. 4, when the Senate confirmed the nominations of Chatterjee and Robert Powelson, a Pennsylvania regulator.

Chatterjee will be chairman only until the expected confirmation of Kevin McIntyre, an energy lawyer, after the Senate returns from its August recess. In the meantime, though, he said the commission will start to catch up on pending orders.

"I believe working through the backlog, especially evaluating the infrastructure projects before the Commission, really could help spur economic development," he said.