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12/15/17

AnnaKatherine Clarke: The NOPR As A Solution In Search Of A Problem

Why The Consequences Of The NOPR Are Significant Across The Country

Regulatory debates aren’t generally considered the most exciting of news. That’s not an excuse, though, for turning a blind eye on the massive changes proposed by the U.S. Department of Energy earlier this fall.

Recently, the Energy Department submitted a notice of proposed rulemaking (NOPR) to the Federal Energy Regulatory Commission (FERC), the body which oversees the U.S. power grid. On its face, the proposal says it will increase the resiliency and reliability of the electrical grid by subsidizing plants able to store 90 days’ worth of energy. In reality, the proposal does not identify any clear problems with resiliency or reliability, subsidizing plants arbitrarily and raising costs for consumers by billions.

While the NOPR won’t affect my hometown of Birmingham the same way it would affect Philadelphia, the looming costs on consumers are something we should all be worried about. Four independent studies have confirmed that consumers will pay upwards of $10 billion per year, and in some cases estimate the cost as high as $288 billion over 10 years. For families along the Mid-Atlantic and Northeast, this proposal could mean electric bills rising between 8 to 10 percent.

Even if you’re outside the servicing region, the NOPR’s ability to entirely change the landscape of the market as we know it should give you considerable pause. After all, the market has solved for a lot. Resiliency is bettered by a diverse array of energy sources, which we’ve increasingly seen as supply responds to demand. Moreover, when it comes to reliability, a Rhodium Group analysis found that less than 0.00007 percent of power disruptions over the last five years were due to fuel supply problems.

From an array of industry associations to consumer groups, there’s widespread consensus around the consequences of the NOPR. The Affordable Energy Coalition was created with the purpose of keeping costs down for consumers, and pulls from these diverse groups. (A mental refresher on the chatter around the NOPR can be found here.)

I’m also particularly concerned because this proposal hits on two things I care about: the magic of the marketplace and clean energy. This proposal would take the few electricity markets in the US that  operate on free market principles and turn them upside down, and all at a time when consumers are demanding cleaner energy and seeing market supply respond, and as renewables like wind and solar are becoming cost-competitive.

That’s why, as part of the American Conservation Coalition, I’m urging FERC not to approve this dangerous proposal. Without identifying a problem, this NOPR offers a solution that will turn aging or uneconomic plants into taxpayer-funded boondoggles. To do this on the backs of consumers is a disgrace, and ignores the progress and successes which the energy market has experienced in the past with a competitive blueprint. FERC should focus on the real challenges our grid faces, not creating solutions in search of a problem.

AnnaKatherine Clarke is a regional policy advisor for American Conservation Council, a millennial-led free-market environmental organization. The American Conservation Coalition works on college campuses nationwide to educate millennials about a conservative approach to clean energy and conservation issues. The ACC supports a broad range of limited-government and market-centric policies to usher in a new generation of stewardship. www.acc.eco

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