FERC says ‘nope’ to Perry NOPR

The Federal Energy Regulatory Commission Jan. 8 gave a thumbs down to the proposal by the Trump administration and Energy Secretary Rick Perry for special treatment of nuclear and coal generation in federally-regulated wholesale electric markets. FERC terminated the rulemaking initiated by Perry (RM18-1-000) Sept. 29 on grid resilience and reliability.

In its 31-page order terminating the rulemaking, FERC said the DOE rulemaking proposal was deficient, failing to meet the requirements of Section 206 of the Federal Power Act to making changes in existing tariffs. “Neither the Proposed Rule nor the record in this proceeding has satisfied the threshold statutory requirement of demonstrating that the RTO/ISO tariffs are unjust and unreasonable.”

The FERC order added that “the extensive comments submitted by the RTO/ISOs do not point to any past or planned generator retirements that may be a threat to grid resilience.” FERC also noted that the Perry proposal “would allow all eligible resources to receive a cost-of-service rate regardless of need or cost to the system. The record, however, does not demonstrate that such an outcome would be just and reasonable. It also has not been shown that the remedy in the Proposed Rule would not be unduly discriminatory or preferential.”

Throwing a sop to the administration and its aim of rescuing uncompetitive coal and nuclear resources, FERC also issued “an order initiating a new proceeding (AD18-7-000) to holisitcally examine the resilience of the bulk power system. The Commission recognizes that it must remain vigilant with respect to resilience challenges, because affordable and reliable electricity is vital to the country’s economic and national security.”

The substitute order “directs operators of the regional wholesale power markets to provide information as to whether FERC and the markets need to take additional action on resilience of the bulk power system. The goals of this proceeding are to develop a common understanding among the Commission, industry and others of what resilience of the bulk power system means and requires.”

The Perry NOPR failed to define “resilience,” and it drew opposition from every sector of the electric industry save coal and nuclear. On the same day of the FERC rejection of the DOE proposal, Apple Computer filed a short (three-page) and powerful argument against the plan. Apple said, “FERC should take action to improve resiliency, but the grid is not facing a crisis.” The performance of the wholesale markets during the widespread deep freeze of the past two weeks gainsaid the DOE NOPR.

The FERC decision to deep six the Perry NOPR was unanimous. In a separate concurrence, Commissioner Cheryl LaFleur said that “even had a resilience issue been demonstrated, I have serious concerns about the nature of the proposed remedy, which would address the issue not through market rules but through out-of-market payments to certain designated resources.

Commissioner Neil Chatterjee, considered the most favorable of the commissioners toward the Perry plan, said he concurred “with the expectation that it is only the first step in a more systematic effort by the Commission, over both the near and long term, to ensure the resilience of the nation’s bulk power system.”

FERC’s Richard Glick

Commissioner Richard Glick said, “There is no evidence in the record to suggest that temporarily delaying the retirement of uncompetitive coal and nuclear generators would meaningfully improve the resilience of the grid.”

Nuclear industry supporters were quick to decry the FERC order. Edward Kee of the Nucelar Energy Consulting Group said on Twitter, that “it may be too late to save multiple nuclear power plants threatened by early retirement.” Will Davis of the American Nuclear Society commented on Twitter, “NOPR dead.”