AEE Reacts to DOE Sec. Perry Proposed FERC Rule

Written By: Stratton Report
September 29, 2017

advanced-energy-economy procurement

AEE Statement in Response to Secretary Rick Perry’s Proposed FERC Rulemaking to Prop Up Uneconomic Power Plants

Graham Richard, CEO of Advanced Energy Economy commented, 

This 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 resources. Simply put, this proposed rule has something for everyone to dislike. If you’re a believer in competition and free markets, this rule would insert the federal government squarely into the middle of market decisions. If you are driven by keeping energy costs low, this rule would impose higher energy costs on consumers for no tangible benefit by forcing electricity customers to pay to keep uneconomic power plants in operation. Finally, if you are driven by innovation and technology, this rule purposefully puts a thumb on the scale for existing, century-old technology at the expense of modern advanced energy that is currently winning based on price and performance.

“This proposed rule would impose additional costs on consumers, lock in old technologies, and do nothing to make the electric power system more reliable or more resilient,” added Richard. “We urge the commissioners of FERC to exercise their independent authority to decline this request to impose a ‘Perry Energy Tax’ on American consumers.”

Secretary Rick Perry had submitted a letter to the Federal Energy Regulatory Commission (FERC) proposing a rulemaking to provide additional payments to so-called “baseload” power plants – specifically, coal and nuclear – with “on-site fuel storage” for their ability to “withstand major fuel supply disruptions caused by natural and man-made disasters,” according to the letter. Under the law, FERC must give consideration to this request, but as an independent agency is not obligated to implement this proposed rule.

This proposed rulemaking follows the Aug. 23 release of DOE’s grid study that Secretary Perry had directed the agency to conduct to “explore critical issues central to protecting the long-term reliability of the electric grid,” and to analyze “market-distorting effects of federal subsidies that boost one form of energy at the expense of others,” and to report back in 60 days.