At the end of September, US Department of Energy Secretary Rick Perry formally proposed to the country’s Federal Energy Regulatory Commission the propping-up and subsidization of the coal and nuclear industries, but immediate and subsequent commentary suggest that Secretary Perry won’t be having things all his way.
Following in the wake of the Department of Energy’s (DOE) August-released grid study report which diminished the importance and value of renewable energy while claiming excessive importance for the coal and nuclear energy industry, Secretary Rick Perry submitted a proposal to the Federal Energy Regulatory Commission (FERC) that would essentially subsidize the coal and nuclear industries for providing what Perry and the DOE call “reliability and resiliency” to the nation’s electricity grid.
The move was unsurprisingly unwelcomed by nearly every group and institution with a stake in the matter — except for those few who will benefit financially. “We worry today’s proposal would upend competitive markets that save consumers billions of dollars a year,” said Amy Farrell, Senior Vice President, Government and Public Affairs, American Wind Energy Association. “We’re concerned this proposed rulemaking uses grid resilience as an excuse to prop up plants that have not been shown to be needed, preventing consumers from buying the power they want to buy,” added Todd Foley, ACORE Senior Vice President, Policy & Government Affairs.
Since the initial announcement, concern over Perry’s proposal has only mounted — and has included two out of the five FERC Commissioners. FERC Commissioner Rob Powelson, who was a former Pennsylvania public utilities commissioner nominated to the position in May and approved by the Senate in August, said in a speech before a PJM meeting, “FERC does not do politics. We don’t do energy politics.” Powelson added that “We will not destroy the marketplace. Markets have worked well and markets need to continue to work well.”
“I’ll give Secretary Perry credit; he’s trying to be thoughtful in the approach but there’s many different approaches on how we can tackle this issue,” Powelson continued. “I did not sign up to go blow up the markets.”
Cheryl LaFleur, another Obama-era appointed FERC Commissioner, backed up Powelson’s comments in a recent Tweet, saying “Great message!”
During the time Secretary Perry submitted his proposal, FERC has published a detailed request for comments on a variety of specific questions it wants and needs answers on. Similarly, a coalition of 11 energy industry associations — including renewable, gas, and petroleum associations — filed an opposing motion with FERC calling on the Commission “to move forward with a deliberative process that considers stakeholder input as it determines whether and how to move forward with a rulemaking.” The Federal Register has also opened up the Grid Resiliency Pricing Rule to comments which will close on November 24, with final action expected to take place by December 11.
It looks as if FERC is likely to take this DOE proposal seriously, and not just rely on President Donald Trump’s desires to wipe out the renewable energy industry and prop-up the coal and nuclear industries. The Commissioners appear to be looking for real answers to real questions, which allows the industry associations lined up against this proposal an opportunity to present real evidence to convince the Commissioners of the proposal’s folly.