FERC defends free markets against Trump's push for more coal, but says the underlying question on grid reliability remains unsettled.
While praised by both the oil and gas trade groups and renewable advocates alike, a ruling on the U.S. grid leaves the question on reliability open.
The Federal Energy Regulatory Commission late Monday killed off a query from President Donald Trump on whether the retirement of the nation's coal-fired power plants was a threat to grid reliability.
Energy Secretary Rick Perry in April called for an investigation into the resilience and reliability of the nation's energy grid. With renewable resources like solar and wind deemed variable because of the nature of their power origins, the secretary said the issue was a critical one given regulatory burdens enacted by previous administrations that could impact legacy resources like coal-fired power generation.
In signaling his support for coal in particular, Trump signed a measure last May to review former President Barack Obama's Clean Power Plan, lift a short-term ban on leasing federal land for coal production, lift limits on coal production and return energy production authority to the states.
In a unanimous ruling, FERC administrators said it was market-based solutions that worked best for more than two decades. Under a "pro-competition, market-driven system," the ruling said that players who can't compete may decide on their own to retire their facilities for economic reasons.
Aligning in rare unity, the American Petroleum Institute, the oil and gas industry's lobbying group, issued a joint statement with the groups like the American Wind Energy Association and the Solar Energy Industries Association in applauding the ruling.
With the strain on demand following the severe winter weather that hit the eastern half of the country last week, however, the National Mining Association said it was disappointed.
"With a surge in demand, coal was the leading electricity supplier in many of the markets subjected to the deep freeze, providing a critical measure of reliability and resiliency to the nation's grid operators," its statement read.
The U.S. Energy Information Administration said electricity generated by natural gas increased, while coal-fired power was on the decline. Renewable resources like wind and solar, meanwhile, has increased by double-digit percent.
The question on reliability remains open, however. In a new order, FERC said "resilience remains an important issue that warrants the commission's continued attention." Under the order, grid operators have 60 days to report back on how they can improve the reliability of the nation's power system.
"The commission recognizes that it must remain vigilant with respect to resilience challenges, because affordable and reliable electricity is vital to the country's economic and national security," it said.