Yesterday, the Federal Energy Regulatory Commission (FERC) rejected a DOE proposal to subsidize to coal and nuclear plants. FERC unanimously voted no to the DOE’s notice of proposed rule making, which would have helped recover costs for power plants.
Last September, U.S. Secretary of Energy Rick Perry formally proposed the DOE’s Grid Resiliency Pricing Rule that directed FERC to take swift action to address threats to U.S. electrical grid resiliency, but by doing so in a way that would favor coal and nuclear sources. Perry proposed that FERC operate under the Federal Power Act to require all independent system operators and regional transmission organizations establish rates for wholesale electricity sales for power plants.
“Federal regulators were right to reject a proposal that would have amounted to nothing more than giving coal and nuclear power plants billions of dollars in guaranteed profits at the expense of consumers,” said Mike Jacobs, senior energy analyst at the Union of Concerned Scientists. “We don’t need to prop up plants that are closing due to market forces. Grid operators are having no problems keeping the lights on as more of the nation’s energy comes from clean, renewable sources.”
In a statement, Kelly Speakes-Backman, CEO of the Energy Storage Association, said that FERC’s actions are an encouraging sign that it is serious about ensuring resilience of the bulk power system.
“By building a robust record of fact from the system operating bodies responsible for reliability and resilience, and by taking the important first step of defining both, FERC is rightly assuring that any actions taken will be holistic and effective,” Speakes-Backman said. “As the eastern ISOs’ successful responses to last week’s winter storms has shown, flexibility is critical to resilience—to ensure uninterrupted power is delivered to consumers whenever and wherever they need it. ESA looks forward to working with FERC, DOE, and other stakeholders to ensure that the flexibility of energy storage can be measured, valued, and compensated effectively to meet the resilience needs of our electric system.”
“If we’re going to adjust prices to value resilience, let’s be smart and get public benefits out of the changes. Rather than limiting contributions from certain energy sources, such as renewables, FERC must continue to consider what is best for consumers, drives private investment and protects the environment,” Jacobs said.”
Shaylyn Hynes, DOE spokeswoman, said in a statement that under Secretary Perry’s leadership, the Department will continue to be actively engaged in the nationwide conversation on resiliency that was sparked by the Secretary’s proposal.
“In the days and months to come, DOE plans to work with FERC and all other relevant stakeholders including the RTOs and ISOs as they discuss how best to address the important issue of the long term reliability and affordability of energy in this country,” Hynes said.