U.S. Energy Secretary Rick Perry issued a formal Notice of Proposed Rulemaking to FERC requesting immediate action to address threats to the resiliency of the nation’s electrical grid, according to a news release issued Friday.
“A reliable and resilient electrical grid is critical not only to our national and economic security, but also to the everyday lives of American families,” said Perry. “A diverse mix of power generation resources, including those with on-site reserves, is essential to the reliable delivery of electricity—particularly in times of supply stress such as recent natural disasters. My proposal will strengthen American energy security by ensuring adequate reserve resource supply and I look forward to the Commission acting swiftly on it.”
Perry mentioned recent severe weather disruptions including Hurricanes Harvey, Irma and Maria in his letter to FERC to underscore why swift action is needed to approve new rules to ensure the U.S. electrical grid remains functional during disasters. One of the key provisions of Perry’s Grid Resiliency Pricing Rule allows coal and nuclear plants that add to the grid’s reliability to fully recover allocated costs and provide reliant energy security.
FERC now has 60 days to act with no guarantee that the Commission will side with Perry although FERC’s new chairman, Neil Chatterjee, has indicated that he may go along with the request.
“I believe baseload power should be recognized as an essential part of the fuel mix,” said Chatterjee, in an August FERC podcast. “I believe that generation, including our existing coal and nuclear fleet, need to be properly compensated to recognize the value they provide to the system.”
Who stands to gain and lose under Perry’s proposal? If FERC agrees with Perry, it could potentially reduce the use of solar, wind and natural gas by key grid operators in favor of coal and nuclear.
Perry’s letter to FERC can be found here.
The Notice of Proposed Rulemaking can be found here.