October 18, 2017 — The Environmental Policy Initiative submitted comments today to the Federal Energy Regulatory Commssion (FERC) on the Department of Energy’s (DOE) Notice of Proposed Rulemaking (NOPR).
The NOPR invokes a rarely used authority that allows DOE to propose a rule under the Federal Power Act. If finalized, the rule would effectively subsidize coal and nuclear power plants by requiring wholesale electricity market operators to pay a preferred rate to generators that have a 90-day fuel supply and can meet other qualifications.
The Environmental Policy Initiative’s comments, written by Senior Fellow Ari Peskoe, note that the NOPR does not propose that wholesale rates are currently unjust and unreasonable or unduly discriminatory. This glaring omission dooms DOE’s proposal under section 206 of the Federal Power Act and allows the Commission to issue a swift rejection without weighing in on the merits.
The NOPR uses the lack of a “grid resiliency” pricing in wholesale electricity markets as justification for the rate changes, but offers no definition of “resiliency.” Moreover, FERC has never used the word “resiliency” in connection with wholesale rates. The Policy Initiative concludes that DOE’s bare assertion that rates do not account for undefined attributes (such as resiliency) does not provide adequate notice necessary for meaningful public comments. Therefore, FERC’s simplest path forward is to reject the NOPR because it is fundamentally inadequate to provide the basis for a final rule.