It is a case of strange bedfellows that only the Trump Administration could create.
The attempt by Energy Secretary Rick Perry to force the Federal Energy Regulatory Commission (FERC) to craft a rule to bail out uncompetitive coal and nuclear power plants generated opposition from not only renewable energy and environmental groups, but current and former regulators, large power users and even the oil and gas industry.
As such, these groups congratulated FERC last night for doing its job and complying with federal law by rejecting the Grid Reliability and Resiliency Pricing rulemaking and beginning a process to look at actual reliability issues. This will start with evidence from grid operators themselves, and not the unsupported claim that power plants with 90-day fuel supplies are necessary for reliability.
“We are very encouraged by the action taken by FERC today,” read a statement by nine energy groups spanning renewable energy, oil and gas and power system interests. “We look forward to engaging with FERC, DOE, and grid operators in an examination of what resilience of the electric power system means and requires, and to demonstrating the contribution of our industries to ensuring reliable power for all.”
It is worth noting that many of those who opposed the rulemaking were members of President Trump’s Republican Party. Commissioner Neil Chatterjee, an outspoken proponent of coal, was unable to find support for the rule despite a majority of Republicans on the commission and with four of five current commissioners being appointed by Trump.
Critics of the rule included Travis Kavulla, vice-chair of the Montana Public Service Commission. “Today FERC looks the part of an expert, independent, cautious [and] skeptical agency that rejects one-size-fits-all solutions,” stated Kavulla on Twitter. However he also expressed concern about the coming “years-long proceeding, without any clear disposition”.
Other energy experts are expressing more optimism about FERC’s next steps. Jason Johns, a partner at law firm Stoel Rives, noted that in rejecting Perry’s mandate FERC is supporting the ongoing function of the wholesale power market.
“FERC reaffirmed its support for markets and market-based solutions, acknowledging that sometimes the market compels retirements simply because a technology has become uneconomic,” stated Johns. “I think it’s safe to say that what comes of compensating resources for “grid resiliency”, to the extent it occurs, will look little or nothing like what Secretary Perry had intended.”
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