On September 28, 2017, the Department of Energy (DOE) filed a Notice of Proposed Rulemaking (NOPR) to the Federal Energy Regulatory Commission (FERC) to reward power plants that stockpile 90 days’ worth of energy onsite. Only nuclear and coal-fired plants can store this amount of fuel.
While the DOE proposal’s stated goals are to increase grid reliability and strengthen resiliency, there is widespread consensus that the proposal would do nothing to achieve these ends. Consumer groups, grid operators, and industry stakeholders all oppose the proposal on the grounds that it would raise prices for consumers and destabilize energy markets.
The DOE has given FERC 60 days to decide on the proposal. The first public comment period ended on October 23, 2017, with the final reply comment period ending on November 7.
Raising Consumer Prices:
The DOE proposal will raise energy prices that will be felt most by the American consumer. Looking just at those in the mid-Atlantic region, the average consumer would pay $114 more than they do now.
Disrupting The Energy Market:
Current market structure has allowed a diverse mix of power sources to compete naturally in the market. By promoting nuclear and coal power at the expense of consumers, the DOE proposal undermines competitive market structures. In their comments to FERC, the R Street Institute said the proposal “is profoundly anticompetitive and lacks empirical support for its claim that an emergency situation justifies massive, abrupt intervention that will likely cost consumers billions without any clear benefit.”
No Change To Reliability:
As older plants age out of the market, the power grid has become more reliable and resilient. In times of emergencies, more power is generated and market forces enable prices to adjust to meet demand. While the DOE proposal claims to make the grid more resilient, it offers no mechanism for action or validation. Instead, the proposal disrupts the market at the expense of consumers without any metrics to show how it has improved the industry.
News And Resources
The Latest Energy Grid Proposal Is A Futile And Awful Waste Of Taxpayer Money
DEC. 29, 2017
How Trump Did The Impossible: Getting Solar And Oil Lobbyists to Unite
DEC. 5, 2017
Affordable Energy Coalition Applauds FERC Decision
JAN. 8, 2018
Blog: The NOPR As A Solution In Search Of A Problem
DEC. 15, 2017
The Affordable Energy Coalition represents a diverse group of industry organizations, businesses, and communities focused on keeping energy affordable for American families.