Energy industry associations reject DOE proposal to subsidize coal, nuclear power plants

A Federal Energy Regulatory Commission (FERC) request for comment on proposed Department of Energy (DOE) rulemakings that would support coal and nuclear power got their answer this week through industry criticism.

A joint filing from a dozen energy industry associations in oil, natural gas, wind, solar and other energy sectors blasted the proposal on grid resiliency pricing, which would provide out-of-market financial support to coal and nuclear power plants in markets overseen by FERC. They ascertained that no emergency exists that would require additional actions to prop up failing plants, and that of the hundreds of comments filed, only a select few productive evidence in support of the proposal, thus failing to demonstrate sufficient reliability or resiliency need to counter these facilities’ retirement.

“We are encouraged to see overwhelming recognition that the proposal would undermine competitive electricity markets, harming consumers and reliability in the process,” Amy Farrell, senior vice president for Government and Public Affairs for the American Wind Energy Association (AWEA), said. “It is particularly telling that even many coal and nuclear plant owners who would receive those payments under the proposal filed in opposition, recognizing short-term gains would be outweighed by long-term harm to electricity markets.”

A select number of beneficiaries, they noted, are the only ones supporting the proposal, and they fail to provide enough justification for it. Further, they said those alternative proposals offered by the beneficiaries demonstrate weakness in the draft rule itself, and offer no better solution to the proposal.

“Even the RTOs and ISOs themselves filed comments opposing the DOE NOPR, noting that the proposed cost-of-service payments to preferred generation would disrupt the competitive markets and are neither warranted nor justified,” the filing said. “Most notably, this includes PJM Interconnection…PJM states that its region ‘unquestionably is reliable, and its competitive markets have for years secured commitments from capacity resources that well exceed the target reserve margin established to meet [North American Electric Reliability Corp.] requirements.’ And PJM analysis has confirmed that the region’s generation portfolio is not only reliable but also resilient.”

These groups ended their argument with the conclusion that while a reliable grid is the goal, the proposed payments would be discriminatory and utterly unsupportable.