Dive Brief:
- Secretary of Energy Rick Perry on Friday begrudgingly granted the Federal Energy Regulatory Commission 30 more days to act on his agency's controversial cost recovery proposal for coal and nuclear plants, warning that doing so would mean continued risk to the nation's electric system.
- Perry wrote that while the "better course of action" would be to act on the DOE proposal by Dec. 11, he would grant the extension "under the assumption that the Commission cannot act within the original 60-day deadline." In the interim, Perry wrote he would "examine all options in my authority ... to ensure the security of the nation's electric grid."
- The extension came in response to a request from FERC Chairman Kevin McIntyre, who wrote to DOE late Thursday asking for more time to analyze the proposal. McIntyre noted FERC has added two new regulators in the past two weeks and received more than 1,500 comments on the plan.
Dive Insight:
Secretary Perry does not appear pleased with the new FERC chairman's request for more time to consider the DOE's grid resilience rule.
In a tersely-worded letter Friday evening, Perry wrote that he has "made clear" there are pressing threats to the nation's electric grid, and that it is FERC's "immediate responsibility" to alter market designs to ensure plants with onsite fuel supplies are "fully valued."
"I further stated that the failure to act expeditiously would be unjust, unreasonable, and contrary to the public interest," he wrote.
Because of the "urgency of this matter," Perry argued that his original request for a 60-day deadline to respond to the proposal was reasonable. If the commission does not act by that time, "the security of our nation's electric system will continue to be at risk."
Even so, Perry wrote that he understands it is "solely within my authority" to grant timeline extensions, and he would set a new deadline of Jan. 10. FERC may also act at any time before that date, he wrote.
"During this additional period, the Department will continue to examine all options within my authority," Perry wrote, "to take remedial action to ensure the security of the nation's electric grid."
Perry's grid resilience plan, filed Sept. 28, proposed full cost recovery for merchant power plants that keep 90 days of fuel onsite. Those plants, he argued, strengthen the resilience of the nation's power grid by enhancing its ability to bounce back from natural disasters or attacks.
FERC received more than 1,500 comments on the proposal, with many critics arguing those plants do little to enhance grid resilience. The coal and nuclear lobbies supported the proposal, while most other stakeholders worried it could "blow up" wholesale power markets.
Perry's extension came a day after a letter from the new FERC Chair Kevin McIntyre saying the commission needed more time to "engage in deliberations." McIntyre was sworn into FERC that morning, while Commissioner Richard Glick took his seat last week.
The extension gives FERC more time to chew over a litany of options on the DOE proposal. The commission is already debating an interim proposal from Commissioner Neil Chatterjee that would provide short-term support to coal and nuclear generators while FERC engages in a longer-term assessment of grid resilience. An alternative reportedly pushed by Commissioners Cheryl LaFleur and Robert Powelson would ask regional grid operators to issue reports on resilience, but would not offer interim subsidies.
