The Federal Energy Regulatory Commission (FERC) rejected a plan to bolster coal-fired and nuclear plants that was proposed by U.S. Department of Energy Secretary Rick Perry.
In a unanimous order, the five-person commission — four of whom President Trump nominated — said Perry and other supporters of the proposal failed to show that current electricity markets are not just or reasonable, findings that would be necessary in order to mandate the higher electricity payments that Perry sought.
In September, Perry had proposed a plan that would have required certain grid operators to pay power producers for their costs plus a reasonable profit, if the power plant at issue has at least 90 days of fuel on-site — a standard that only coal and nuclear could meet. Supporters of the plan said this would protect against severe weather and other disruptions.
However, the Republican-controlled commission issued the surprising decision amid repeated promises by Trump to revive coal as the nation’s top power source.
The Hill reported that the rejection is a major victory for natural gas, wind, solar and other industries that compete with coal and nuclear. They joined with conservative activists, environmentalists, grid experts, big businesses and others in opposition to the proposal.
But in a concession to coal and nuclear, FERC launched an effort to formally ask electric grid operators what they are doing, if anything, to ensure that their grids remain resilient, which was the goal of Perry’s plan.
“The [Federal Power Act] is clear: in order to require [grid operators] to implement tariff changes as contemplated by the Proposed Rule ... there must first be a showing that the existing [grid] tariffs are unjust, unreasonable, unduly discriminatory or preferential,” the commission wrote. “Neither the Proposed Rule nor the record in this proceeding has satisfied the threshold statutory requirement of demonstrating that the [grid] tariffs are unjust and unreasonable,” it said.
“In addition, the extensive comments submitted by the [grid operators] do not point to any past or planned generator retirements that may be a threat to grid resilience.”
Supporters or Perry’s plan said that coal and nuclear plant closures, which have been increasing in recent years due to cheap competition and regulations, threatened to make the electric grid less resilient and more prone to long blackouts.
It was roundly criticized as a politically motivated move to boost power sources the Trump administration favors.
Perry said he was glad to start an important conversation about threats to resilience.
“As intended, my proposal initiated a national debate on the resiliency of our electric system,” he said in a statement.
“What is not debatable is that a diverse fuel supply, especially with on-site fuel capability, plays an essential role in providing Americans with reliable, resilient and affordable electricity, particularly in times of weather-related stress like we are seeing now,” Perry continued, promising to keep working with FERC on the matter.