On Friday afternoon, Energy Secretary Rick Perry said the US energy regulator could take an extra 30 days to make a decision on a proposed rule that would boost struggling coal and nuclear power in the US.
Perry proposed a rule in late September that would require grid operators to change how they value “reliability and resilience attributes” in energy generation. Specifically, generation plants with such attributes were defined by the Energy Secretary as plants that could keep a 90-day supply of fuel onsite. Although the proposed rule was written to appear energy-agnostic, it clearly favors coal and nuclear plants. Natural gas tends to be delivered by pipeline and is rarely stored onsite in large quantities, and wind and solar energy have free but variable fuel sources, though pioneers in the field are trying to mitigate this with the help of stationary storage.
Without government intervention, coal has become more expensive to burn compared to natural gas in many areas. It’s also a major contributor to climate change, something the president has falsely called a hoax.
The five-person Federal Energy Regulatory Commission (FERC) must sign off on the rule for it to take effect. FERC was originally given a 60-day deadline to study the rule, gather public comment, and make a decision on whether to institute it, but Chairman Kevin McIntyre requested an extension Friday morning after he was sworn into his position, according to Utility Dive. Acting Chairman Neil Chatterjee, who held McIntyre’s spot before his promotion to chairman, was vocal about his support for the proposed rule, even suggesting an interim solution that would require regional grid operators to make short-term payouts to at-risk coal and nuclear plants. But commissioners Cheryl LaFleur and Robert Powelson have been critical of the rule, arguing that more-expensive coal and nuclear are already compensated by the market for continuous power delivery when they get paid high prices for energy during times of energy scarcity. Powelson even said in October that the rule would “destroy the marketplace.”
The rule has been seen as a direct extension of Trump campaign promises. When Energy Secretary Rick Perry was sworn into office, one of his first actions was to commission a “baseload energy” study, in which Perry claimed that regulatory burdens created by the Obama Administration had reduced coal-fired generation and “destroyed jobs and economic growth,” in addition to threatening to “undercut the performance of the grid well into the future.”
The commissioned report did not reflect the same unsubstantiated political hyperbole, but delivered the Energy Secretary enough to justify the proposed rule. The baseload report recommended that power markets revise how they value coal and nuclear power, but it also pointed out that low natural gas prices, rather than the previous administration’s policies, were the culprit in recent coal and nuclear closures. The study also suggested that reliability of the US grid could be enhanced by supporting research on grid resilience during extreme weather events and fuel price shocks. (Fuel stockpiling doesn’t necessarily address these concerns, as coal plants were temporarily converted to natural gas in the aftermath of Hurricane Harvey when coal piles were flooded, and nuclear plants are taken offline regularly for maintenance and occasionally in anticipation of hurricanes.
In his Friday letter to FERC (PDF), Perry told the commission that he had expected urgent action on the rule, “in light of serious threats to the nation’s electricity grid,” referring to his September letter (PDF) citing “premature retirements” of coal and nuclear plants. However, Perry granted a 30-day extension for FERC to continue deliberating the rule. Now, a decision is expected no later than January 10, 2018, although FERC could issue a decision earlier than that. During the 30-day extension, Perry said that the Department of Energy would review how it could “take remedial action as necessary to ensure the security of the nation’s electric grid.”
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