Perry backing rule to help coal and nuclear plants

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Perry backing rule to help coal and nuclear plants

From 2010-2015, 37 GW of coal-fired generation was retired, accounting for 52% of all power plant retirements, and by 2020 another 34.4 GW of summer capacity (49% of it coal, 30% natural gas and 15% nuclear) is planned to be retired, Perry said.

The proposed rule would require independent system operators (ISOs) and regional transmission organisation (RTOs) regulated by FERC to implement new electricity market rules compensating eligible power producers for their contributions to reliability and resiliency.

"To make his case, "explains ThinkProgress' Joe Romm, "Perry has fabricated an economic threat to US grid reliability from cheap renewables and then proposed a rule to account for the imaginary reliability benefit of other electricity sources-all the while ignoring the actual health and environmental costs of carbon pollution from burning coal that aren't priced in to the market yet". Coal, nuclear, and hydroelectric power plants fit the bill, and variably-generating renewable resources like wind and solar would be left out of whatever compensation scheme comes out of FERC's rulemaking process.

"[Sec. Perry's proposal] would essentially ensure that coal and nuclear plants in regions encompassing most of the country continue to run even where they are too expensive to compete in the energy market".

"Markets play an important role in determining energy sources because markets reward innovation, spur efficiency, lower prices and work to benefit consumers".

The American Petroleum Institute said it was concerned that the Energy Department had "mischaracterized" the lessons learned from severe weather events that have taken down power resources in the U.S.in the past.

The proposed rule is not entirely novel.

"In September 1927, [Philadelphia Electric Co.], [Pennsylvania Power and Light], and [Public Service Electric and Gas] collaborated to bring to life an ingenious idea-a power pool", said PJM CEO and President Andrew L. Ott in a press release marking the event. "This is a historic day for PJM".

Amy Farrell, senior vice president for the American Wind Energy Association's Government and Public Affairs division expressed concerns that the proposal would "upend competitive markets" that save consumers billions of dollars a year.

FirstEnergy welcomed the proposal which it said recognized the importance of a "reliable, resilient" electric grid.

Her organization, she said, is determined to fight a rule.

Advocates of renewable energy reacted warily. "This is particularly surprising given that the staff report to the secretary on electricity markets and reliability acknowledged the importance in fuel neutrality in its recommendation that FERC study and consider a way to value reliability attributes in its wholesale electric market rules". "The coal fleet has large stockpiles of coal that help to ensure grid resilience and reliability".

The NOPR was prompted by lessons learned from the experiences of the polar vortices of 2014 and hurricanes Sandy, Harvey, Irma and Maria, Perry said.

The Sierra Club, the environmental group behind Beyond Coal-a powerful and merciless campaign to shut down coal-fired power plants-noted that the DOE's direction to FERC-an independent agency-was a brazen one.

The rise of these energy sources, especially solar and wind power, has raised concerns in some circles about the reliability of USA power generation.

In a letter to the commission dated today, Perry asks FERC to approve a rule, on an expedited schedule, that would allow utilities to recover the fully allocated costs for traditional "baseload resources" like coal and nuclear plants because, in his words, they provide "the energy security on which our nation relies". "We are prepared to take to court any illegal rule that props up dirty fossil fuel plants or weakens clean energy's market access".

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