Department of Energy: Nuclear policy, nuclear money, and the millennial caucuses

Secretary Rick Perry and Millennial Nuclear Caucus
October 2017
From Department of Energy website

Millennials 
Starting this past fall,  I finally noticed that the current Department of Energy was not the old Department of Energy. In October 2017, DOE cooperated with the Nuclear Energy Institute and held the first Millennial Nuclear Caucus, in Washington DC. At that event, Secretary of Energy Rick Perry met with a group of young nuclear professionals.  In a post on the DOE website, Secretary Perry said: "I had the pleasure of meeting with a number of young visionaries in the nuclear field this morning." As a matter of fact, the hashtag for the Millennial Nuclear Caucus meetings is #NuclearVisionaries.  Here's a brief video of part of the meeting.


More to come
When I saw the announcement of the first caucus, I felt terrific. The Department of Energy promoting young people and nuclear! Well, the only word was--- awesome!

Next, I realized there was more to come. I learned that the Washington meeting was going to be the first of a series of caucuses.  So far, there has been the first Caucus in Washington, another in Ohio, and a third a few days ago at Texas A&M University.  The Caucuses are listed on this page of the Department of Energy website.  https://energy.gov/ne/millennial-nuclear-caucus Videos of the Caucuses are at the U. S. Department of Nuclear Energy Facebook page
https://www.facebook.com/NuclearEnergyGov

UPDATE: The next Millennial Nuclear Caucus will be March 7 in Washington D.C. https://www.eventbrite.com/e/millennial-nuclear-caucus-tickets-43452885751

The most recent Caucus took place at Texas AMU on February 20. Once again, the millennial panelists were from various types of nuclear facilities: national labs, start-ups, operating plants. This time, the leader from DOE was Suzie Jaworowski, senior advisor to the DOE Office of Nuclear Energy. Here (hopefully) is a direct link to video of the meeting on the DOE Nuclear Facebook page
https://www.facebook.com/NuclearEnergyGov/videos/215074865735271/

Hype or real?
Now, first of all, I would be happy even if this new look by DOE were only hype. I am happy that the the government is holding and co-sponsoring events like the Millennial Nuclear Caucus. Previous administrations tended to act as if nuclear power were some sort of embarrassment. The current DOE Facebook page and the nuclear-positive events show a change in attitude.

However, if you go to the video of the Texas meeting on the Facebook page,  you will see Rod Adams ask a question that he admits puts Suzie Jaworowski "on the spot."  (Move the slider to about 1:02) To paraphrase Adams's question: This is all very good, but the DOE budget proposal has less money for nuclear for next year than it had for this year.  Is DOE really going to be able to support nuclear?

Side note:  Optimism, pessimism, realism  and everything in between before the official start of the Advanced Reactor Summit V is Rod Adams post which includes his comments on the Millennial Caucus meeting.

What was Jaworowski's answer?  Since the budget isn't totally set, the answer couldn't be totally set either. Jaworowski answered that DOE is focusing on its priorities. High priorities include keeping the existing fleet going, and keeping the pipeline of future projects underway. There are also plans for public-private partnerships, with government and private money leading to innovations.

Policy or money?
You might say Jaworowski gave a standard-issue answer, and maybe it was.  But I notice the nuclear group at DOE running events, making videos, posting to FB, and I am encouraged.

The federal government has been running immense deficits for years, and the Republicans are the party of "small government and decreased government spending." Therefore, budget cuts were inevitable, from both a practical (deficits) and policy (Republican) point of view.  Considering that budget cuts will be coming, the new pro-nuclear initiatives of the current administration are very welcome.

In other words, if the major role of the government is to spend money, then things are looking bad.  If the major role of the government is to set policy, then things are looking better.  I think this administration's policies will be pro-nuclear. I believe these policies will have an impact.

I am well aware that support of energy initiatives usually requires both policy and money.  I know money/policy is not a simple either-or.  However, setting policy is the first step.

If you look at Rod Adams post (linked above) you can see a somewhat more pessimistic evaluation of the future of nuclear. I'm not so sure of myself as to say he is wrong.  And he isn't completely pessimistic, either. Maybe I am just an optimist.  Still, I am optimistic about the DOE initiatives.

Only time will tell.

Update: FERC Acts to Support Reliability

Secretary Rick Perry

The Energy Study 

In April, Secretary of Energy Rick Perry announced that he was requesting a study about whether today's electricity markets are doing an adequate job in terms of providing grid reliability, reliance and stability. Under most circumstances, an announcement of such a proposed study would cause everyone to fall asleep. Nowadays, though, this proposed study was considered revolutionary and perhaps obscene.

The general weltanschuang (German used quite deliberately) of studies under the last administration did not encourage looking at questions of mere grid reliability.  The only allowable questions seemed to be: "How can we get more renewables (and gas backup) on the grid?"  When Secretary Perry asked for a reliability study, he set the natural gas industry into a state of shock. They had a pretty good idea of what such a study would show. They didn't like it one bit.

If you think people were upset that this study was performed at all, you can imagine the anger when it showed the value of base-load plants. The DOE study showed a need to increase grid reliability by supporting base-load plants that can store fuel on site. Yes, that means coal and nuclear.

The FERC Rule-Making

After a FERC study is completed, if it shows a need for a change in the electricity markets, the next step is FERC making a rule for the change. FERC starts this process by issuing a Notice of Proposed Rulemaking, (NOPR). FERC recently issued an NOPR for the Grid Resiliency Pricing Rule, based on the DOE study.
Here's the link to the proposed rule: https://www.energy.gov/sites/prod/files/2017/09/f37/Notice%20of%20Proposed%20Rulemaking%20.pdf

The bulk of the rule is on page 11: (FERC shall)...issue a final rule requiring its organized markets to develop and implement market rules that accurately price generation resources necessary to maintain the reliability and resiliency of our Nation's bulk power system.  The proposed rule allows for recovery of costs of fuel-secure generation units frequently relied upon to make our grid reliable and resilient. 

Update: The easiest way to comment on this rulemaking is to use the Nuclear Matters link Urge Policymakers to Protect Nuclear Energy.  You fill out your contact information and click :Submit. There is a pre-written comment on the form, but you can edit it as you wish.  Click the link and submit your comment today or tomorrow!  Time is short. October 23 is the last day for comments.

Beating Back the Attacks

There are so many things to say about this rule-making!  And so many things have been said!  You would think this is the first NOPR that FERC had ever issued.  It isn't.  Here's a brief run through the proposal and the attacks on the proposed rule.

The DOE study:  
I recommend Rod Adams excellent blog post of August 24, Long awaited DOE report on electricity markets and reliability. The post includes links to the study itself.

Is this rule-making legal?  Is it rushed?  
Yes it is legal. Once again, Rod Adams has a good overview: Rick Perry Directs FERC to Complete Final Action on Resiliency Pricing Rule in 60 Days. In Utility Dive's article Powelson: FERC 'will not destroy the marketplace' in cost recovery rulemaking, Acting FERC Commissioner Neil Chatterjee explains that the new rule will have a record, docket, and analysis. Just like the rest of the rules. In the same article,  Scott Hempling, a Georgetown law professor, said there is no statutory obligation for any particular period of time for comments.  My own understanding is that 60 day and 90 day comment periods are pretty standard.

Isn't this "rule" kind of vague?
Yes. It is slightly more vague than usual.  According one of the articles in Utility Dive, energy lawyers say that the vagueness of the rule may give more room for industry input on the final product.   But frankly, it is not out of line with other FERC rule-making.  For example, in FERC 1000, one of the most complex and contentious parts of the rule is stated pretty simply: Local and regional transmission planning processes must consider transmission needs driven by public policy requirements established by state or federal laws or regulations.  FERC rarely tells system operators exactly what to do: FERC directs them to "consider this" or "allow for that" etc.  Kind of vague, but then again, they are the system operators and they have their own constraints.

Is FERC Fuel-Neutral, Part 1:
Former FERC Chairman Jon Wellinghoff said that a proposed rule supporting baseload plants "would blow the market up."  At FERC, according to Wikipedia, Wellinghoff's three priorities were integration of renewables, energy efficiency, and demand-side energy practices, such as real-time pricing.  Wellinghoff didn't mention reliability in his priorities as FERC chairman. I also don't notice that anybody blamed him for supporting the expansion of renewable energy. When some people claim that FERC must be "fuel neutral," they apparently don't mean "treat renewable installations like other power plants."

Is FERC Fuel-Neutral, Part 2:
FERC doesn't like rules that say: Gas plants shall or coal plants shall. For a FERC rule, don't actually name the type of plant.  The new proposed rule doesn't name types of plants.  Any plant that can store 90 days worth of fuel qualifies for recovery of costs of fuel-secure generation units.  FERC and grid operators have many rules for how plants get paid: there's the whole business of ancillary services.  Grid operators pay for ancillary services (reactive power, quick dispatch) even though only certain types of plants can provide these services.  If FERC determines that "fuel security" is important for grid reliability, it can make sure that plants that are able to supply the fuel-security service are paid for that service. This is not revolutionary.

And the final question: Is this going to "blow up the markets"?
There is no market to blow up.  On Friday, Utility Dive quoted Rick Perry saying: There is no free market in electricity. I have been saying this for a while.  I recommend an article by Travis Kavulla, of the Montana Public Service Commission. His article in American Affairs  is titled: There Is No Free Market for Electricity: Can There Ever Be?  It's a good summary of how nobody can "blow up the market" because there really isn't a market.

Finally...

Actually, there is no "finally" because FERC is beginning the rulemaking process, and we won't see the final rule for perhaps 90 days.  That is, 60 days for comments, some more time for putting the final rule together.  But in another way, I can say:

Finally, the government is paying attention to the reliability of the electric grid!