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FERC rejects Trump administration proposal for consumers to subsidize coal and nuclear plants

FERC rejects Trump administration proposal for consumers to subsidize coal and nuclear plants
New proceeding initiated that may lead to a new NOPR defining “resiliency”

In an impressive display of independence and judicious reasoning, the Federal Energy Regulatory Commission today unanimously rejected the Trump administration’s outrageous proposal to require the nation’s electricity consumers to subsidize the operations of economically struggling coal and nuclear generating facilities.

The Notice of Proposed Rulemaking (RM18-1) before the FERC, which Energy Secretary Rick Perry advanced in September, flew in the face of more than 20 years of bipartisan policy in support of competitive markets for electricity. It would have imposed hundreds of millions of dollars in costs on the nation’s economy and reversed environmental gains that have been a welcome unintended benefit of the competitive markets.

“The Commission’s support of competitive wholesale electricity markets has been grounded in the substantial and well-documented economic benefits that these markets provide to consumers,” FERC said in scuttling the NOPR.

But those who dance on the proposal’s grave would do well to recognize its long-term impact. Now, in addition to grid reliability, we’ve a new, ill-defined concept of “resiliency” which the Trump-era DOE has introduced.

FERC, while killing the NOPR, has initiated a new proceeding (AD18-7) which should help to define this term, resiliency. It ultimately should provide the due process and reasoned decisionmaking that the previous DOE-sought NOPR lacked. Down the road, there may be a new NOPR, one that embraces market-based principles in seeking to bolster grid resiliency, whatever that may ultimately be defined as.

To start the process, FERC has proposed defining resilience as: “The ability to withstand and reduce the magnitude and/or duration of disruptive events, which includes the capability to anticipate, absorb, adapt to, and/or rapidly recover from such an event.”

Initial comments are due in 60 days from the regional transmission system operators and independent grid system operators that oversee the country’s organized regional competitive markets. Any other interested parties may submit comments 30 days after that. The nation is watching.

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