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Comments to the Federal Energy Regulatory Commission on Grid Reliability and Resilience Pricing

Energy Secretary Rick Perry’s controversial proposal to subsidize coal and nuclear plants could have terrible consequences for consumers and public health, as our recent comments and op-ed in US News highlight. In September, Perry asked the Federal Energy Regulatory Commission (FERC) to adopt a new rule that would guarantee coal and nuclear plants their full costs plus a profit, so long as they keep 90 days of fuel on site. Perry claims that these “fuel-secure” plants ensure grid reliability and resilience, but neither he nor FERC adequately define these terms or explain why such a measure is justified. Our comments to FERC argue that adopting the rule would violate FERC’s duty to keep wholesale electricity rates “just and reasonable” and “not unduly discriminatory or preferential,” as paying power plants their full costs so long as they keep onsite fuel reserves would increase costs to customers without any clear corresponding benefits. We recommend that, if FERC is concerned about the resilience of the electric grid, it begin a longer-term rulemaking process that encourages technology-neutral, market-based solutions that pay only for the resilience benefits that energy technologies actually provide.