Economy

Energy Department Urges Pricing Shift that Could Bolster Coal, Nuclear

Energy Department Urges Pricing Shift that Could Bolster Coal, Nuclear”

"The Federal Power Act clearly states that FERC cannot favor one energy source over others in its rulemakings, and Perry's ask - without evidence or common sense - seeks to prop up unsafe coal and nuclear plants that can no longer compete in the wholesale market". It is a clumsy attempt to drive the Trump administration's efforts to force customers to pay more to bailout America's remaining uneconomic coal and nuclear plants and help their billionaire polluter allies.

Graham Richard, CEO of Advanced Energy Economy, a national business group, said in a statement that the proposed rule ignores the primary finding from Secretary Perry's own grid study from just a month ago, which was that the grid is being managed reliably with today's diverse energy resource. Now, the agency is asking federal regulators to presume that's the case, and create a rule that could provide coal and nuclear plants with additional financial support - potentially at the expense of natural gas, solar, wind and other alternatives. "My proposal will strengthen American energy security by ensuring adequate reserve resource supply and I look forward to the commission acting swiftly on it". "In the wake of the incredible disruptions caused by extreme weather events in recent years, including multiple hurricanes and polar vortices, the urgency to act in support of the resiliency of the electric grid has never been clearer", she said. While FERC commissioners are appointed by the president, the agency is otherwise independent and not obligated to follow through on Perry's request.

Currently, grid operators in most of the country use competitive markets, in which the lowest-cost power sources usually get contracts. Incoming FERC Chairman Neil Chatterjee said in a recent interview that "baseload power should be recognized as an essential part of the fuel mix", and that "generation, including our existing coal and nuclear fleet, need to be properly compensated to recognize the value they provide to the system".

DOE filed a Notice of Proposed Rulemaking (NOPR) under the Federal Power Act to enhance grid resilience, directing FERC to "accurately price generation resources necessary to maintain reliability and resiliency".

But Chatterjee has also pledged to protect FERC's independence, and said he prefers to avoid making any major decisions until Kevin McIntyre, Trump's pick to be the commission's long-term chairman, is confirmed by the Senate and sworn in. On Twitter, energy lawyer Ari Peskoe, senior fellow in electricity law at Harvard Law School's Environmental Policy Initiative called the 60-day proposal "practically and legally impossible". During this cold snap across the Eastern U.S., spikes in heating energy demand came amidst cold-related power plant closures that could have led to blackouts, had several coal power plants now slated for future closure not been available to serve the load. That report concluded that coal and nuclear plant closures could cause resilience problems at some point in the future, but grid operators are now handling the challenges well.



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