Yesterday (Jan. 9) the Federal Energy Regulatory Commission (FERC) unanimously denied Energy Secretary Rick Perry’s proposal for special subsidies for nuclear and coal-fired power plants—a decision supported by renewable energy industries, grid operators and others. Instead FERC is requiring grid operators to submit information on electric grid resilience.
“We are very encouraged by the action taken by FERC today. We look forward to engaging with FERC, DOE, and grid operators in an examination of what resilience of the electric power system means and requires, and to demonstrating the contribution of our industries to ensuring reliable power for all,” stated a wide swath of electric industry advocates including solar and wind associations and even the American Petroleum Institute (API).
The Trump Administration has tried to make coal-fired power more competitive with other forms of electric generation since it gained control last year. Shortly after taking control, for instance, Perry required his department to create the review the US’ electric markets and evaluate them for “reliability.”
The move was widely seen as an attempt to show that “baseload” electric generators, like coal and nuclear power plants, were more reliable than clean energy generation but lower costs from wind, natural gas, and solar power were making the US energy grid less reliable. The final study, however, found that the biggest risk to the US electric grid was in transmission infrastructure.
Then in September Perry proposed a new subsidy for electric generators that kept 90 days of fuel onsite that could operate during disasters. The main beneficiaries of the Notice of Proposed Rulemaking (NOPR) were nuclear and coal-fired power plants, but the proposal was highly criticized and it was observed that the proposed rule could cost US consumers and businesses $10.6 billion in extra energy costs.
The commissioners fired back against the proposed rule. “In effect, [the proposed rule] sought to freeze yesterday’s resources in place indefinitely, rather than adapting resilience to the resources that the market is selecting today or toward which it is trending in the future. I believe the Commission should continue to focus its efforts not on slowing the transition from the past but on easing the transition to the future,” stated Commissioner Cheryl LaFleur.
Commissioner Richard Glick observed that renewable energy sources have helped increase the resilience of the electric grid. “The record demonstrates that, if a threat to grid resilience exists, the threat lies mostly with the transmission and distribution systems, where virtually all significant disruptions occur. It is, after all, those systems that have faced the most significant challenges during extreme weather events,” he said.
The American Wind Energy Association (AWEA) also issued its own statement on the ruling. “We’re encouraged by FERC’s action because it recognizes that no past or planned power plant retirements threaten grid resilience. This action starts a thorough look at how to assess the grid’s resilience, and how FERC and the RTOs might apply further market-based approaches to protect it,” said Tom Kiernan, CEO of AWEA.
“In particular, we’re glad to see FERC’s focus on wholesale electric market rules, transmission planning, and standards set by the North American Electric Reliability Corporation. Those are all key to ensuring long-term grid resiliency,” Kiernan added.Tweet