The feds appear to be making moves to silence a whistleblowing agency, the North Americans Electric Reliability Corporation (NERC), “because NERC's position is that the EPA goal of mothballing many or most coal-fired power plants could endanger the security of the electric-power grid, with possible blackouts and much higher energy costs. In a follow-up report last year it found that ‘Environmental regulations are shown to be the number one risk to reliability over the next one to five years,’” according to the Wall Street Journal.
Getting Even on Reliability
The feds retaliate against an advisory board for doing its job.
Imagine if some obscure trading desk within J.P. Morgan had tried to warn Jamie Dimon about corporate malfeasance—or perhaps a risky investment—and it turned out he tried to shut up the whistleblower. We'd never hear the end of it. Somehow the same norms don't apply in government, as shown by a federal energy regulator's reprisals against an independent advisory body.
The target is the North American Electric Reliability Corporation, or NERC, and its crime is scrutinizing the Obama Administration's anticarbon agenda. This highly respected nonprofit has monitored the power system since the 1960s and establishes best practices to keep the lights on. In 2005, Congress gave NERC a formal role as adviser. But now it may be defrocked for questioning the "pace and aggressiveness" of the Environmental Protection Agency's regulatory wave in a 2010 report.
NERC's position is that the EPA goal of mothballing many or most coal-fired power plants could endanger the security of the electric-power grid, with possible blackouts and much higher energy costs. In a follow-up report last year it found that "Environmental regulations are shown to be the number one risk to reliability over the next one to five years."
Apparently that was too honest for Washington. Earlier this month the Federal Energy Regulatory Commission disclosed that it has spent months conducting a highly unusual audit of NERC. The commission oversees NERC under the 2005 law, so it has every right to check its practices. But this probe exceeded normal auditing standards and was a free-floating investigation into NERC's "economy and efficiency," whatever that means. It didn't find any rule-breaking.
Instead, the auditors question NERC's focus and statutory responsibilities, concluding that it "may have exceeded the functions" Congress intended for a reliability organization. Never mind that NERC has been doing the same job for decades and its integrity hasn't been questioned. The feds also complain about NERC's "periodic reliability assessments," otherwise considered the gold standard. They say this role "should be revisited."
In other words, the energy G-men think NERC should help protect reliability without studying the actual threats to reliability. This may be intimidation to get NERC to tone down its candor, or it could be a prelude to decertifying NERC to silence a troublesome critic. NERC tried to compromise on some of the audit's proposals while protecting its core duties, but the feds are now litigating to impose them.
The back story is that Federal Energy Regulatory Commission Chairman Jon Wellinghoff is an EPA wingman and President Obama ally. He has told the trade press that he has "some real, real, real serious issues with respect to the functioning of NERC," without details, and he launched the audit on his own personal authority as boss. It's especially notable that Commissioner Cheryl LaFleur—an Obama appointee—attacked the move as "inconsistent with Commission regulations" and said it should have been put to a vote.
Bureaucratic infighting is an eternal reality of government, but Congress should ask Mr. Wellinghoff what he has to fear from honest counsel.