Distributed Energy Resources, Power Prices, Regulation  -  October 2, 2017

Oil, gas, solar, wind associations ban together opposing DOE's call for baseload reliability payments

Following the Sept. 29 proposal from U.S. Energy Secretary Rick Perry that the Federal Energy Regulatory Commission move to increase compensation for generators providing baseload power supplies such as coal and nuclear, a group of 11 energy industry associations spanning natural gas, wind, solar, rural electric cooperatives and other segments jointly filed a motion opposing the U.S. DOE's request. 

The motion was filed at the FERC on Oct. 2, following Perry's formal Notice of Proposed Rulemaking, or NOPR, under the Federal Power Act, asking FERC for what is being called the most significant overhaul in the nation's competitive power markets in more than a decade.  In the NOPR, the DOE directs FERC to require its organized markets to "develop and implement reforms that would fully price generation resources necessary to maintain the reliability and resiliency of our nation's grid."

The 11 associations — the Advanced Energy Economy, American Council on Renewable Energy, American Petroleum Institute, American Public Power Association, American Wind Energy Association, Electricity Consumers Resource Council, Electric Power Supply Association, Interstate Natural Gas Association of America, National Rural Electric Cooperative, Natural Gas Supply Association and Solar Energy Industries Association — said they oppose the DOE's request for such a rule from FERC. Additionally, they have requested that any comment period should be at least 90 days, given potential ramifications for consumers and billions of dollars of electric sector investments; and that a technical conference be held prior to the end of the comment period for stakeholders to better understand the proposal and provide meaningful input. 

The motion also notes that the other deadlines in the DOE proposal are "wholly unreasonable and insufficient" and should be extended, should FERC "decide to proceed with a rulemaking of this type at all."

In a Sept. 29 statement, AWEA Senior Vice President of Government and Public Affairs Amy Farrell said the group worries that the DOE proposal would "upend competitive markets" that save energy consumers billions of dollars a year. 

"The best way to guarantee a resilient and reliable electric grid is through market-based compensation for performance, not guaranteed payments for some, based on a government-prescribed definition," Farrell said. "We look forward to participating in the process as FERC begins to consider the proposed rule." 

The Business Council for Sustainable Energy also urged caution Sept. 29, saying market rules that allow for competition of resources and that value evolving needs of the grid are the best was to maintain grid performance and ensure resiliency.

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