DOE Secretary Perry orders study on effect of regulations on grid reliability

U.S. Department of Energy (DOE) Secretary Rick Perry recently asked the department to conduct a study on the effect of regulations and policies on baseload power and grid reliability to be completed in June.

“There are significant changes occurring within the electric system that could profoundly affect the economy and even national security, and as such, these changes require further study and investigation,” Perry said. “We are blessed as a nation to have an abundance of domestic energy resources, such as coal, natural gas, nuclear, and hydroelectric, all of which provide affordable baseload power and contribute to a stable, reliable, and resilient grid. Over the last few years, however, grid experts have
expressed concerns about the erosion of critical baseload resources.”

In a memorandum to his chief of staff, Perry said that regulatory burdens are causing problems for baseload generation,
decreasing the diversity of the generation mix and “destroying” economic growth.

“Analysts have thoroughly documented the market-distorting effects of federal subsidies that boost one form of energy at the expense of others,” Perry said. “Those subsidies create acute and chronic problems for maintaining adequate baseload generation and have impacted reliable generators of all types.”

The federal government will use the results of the study to inform policy decisions, Perry said.

NEI Senior Director of Policy Development Matt Crozat cited the premature shutdown of various nuclear plants and said that action needed to be taken to stop these premature closures.

“By undervaluing nuclear power plants, current market policies and practices threaten the diversity of our nation’s generating portfolio and our ability to meet environmental goals,” Crozat said. “We look forward to the agency’s report on electricity markets and will continue to work with the administration to address these critical issues in U.S. electricity markets.”

American Council on Renewable Energy (ACORE) President and CEO Gregory Wetstone said that Perry’s assertions contradict other research, however, citing market forces as the reason for the decline of coal and other energy resources.

“The reality today is that renewable power offers the only realistic economic alternative to natural gas,” Wetstone said. “Together, renewables like wind and solar have combined with natural gas to produce virtually all of the nation’s major new electrical capacity since 2014. The fact is that low natural gas prices have made coal and nuclear less competitive economically.”