FERC invites comment on grid reliability and resilience pricing proposal

Thursday, October 5, 2017

U.S. electricity regulators have invited public comment on a draft rule proposed by the Secretary of Energy that would require some grid operators to buy electricity from certain generators at rates that allow the generators to recover their costs and a return on equity.  The Secretary has set the grid resiliency pricing rulemaking proceeding on a fast track -- but some energy industry associations have asked regulators to allow more time for public participation before finalizing "a proposed rule that could affect electricity prices paid by hundreds of millions of consumers and hundreds of thousands of businesses, as well as entire industries and their tens of thousands of workers."

On September 28, Secretary Perry directed the Federal Energy Regulatory Commission to open an expedited rulemaking proceeding to consider a proposed rule affecting the compensation paid to certain "grid reliability and resiliency resources" with a 90-day fuel supply on site and capable of providing "essential energy and ancillary reliability services, including but not limited to voltage support, frequency services, operating reserves, and reactive power."

Acting under Section 403 of the Department of Energy Organization Act, Secretary Perry directed the Commission to consider and complete final action on his proposed rule proposed within 60 days.  But he also suggested that circumstances warrant faster action -- such as issuing the proposed rule as an interim final rule, effective immediately, with provision for later modifications after consideration of public comments.
On October 2, the Commission issued a Notice Inviting Comments in Docket No. RM18-1-000.  That notice invited interested persons to submit comments regarding the proposal on or before October 23, 2017, with reply comments due on or before November 7, 2017.

Also on October 2, a coalition of energy industry associations filed a joint motion asking the Commission to take more time in its consideration of the proposed grid resiliency pricing proposed rule or "NOPR".  In that joint motion, the associations note that no emergency or other circumstance exists which justifies the use of an interim final rule.  They cite the "importance and potential implications of the NOPR for Commission-jurisdictional markets," calling it "one of the most significant proposed rules in decades related to the energy industry."  The associations argue that because the time limits set by the Secretary are "unreasonable," so the Commission should set its own timeline allowing more time for participation.

The energy industry associations who filed the joint motion represent a fairly broad slice of the energy sector.  Participating associations include Advanced Energy Economy, American Council on Renewable Energy, American Petroleum Institute, American Wind Energy Association, American Public Power Association, Electric Power Supply Association, Electricity Consumers Resource Council, Interstate Natural Gas Association of America, National Rural Electric Cooperative Association, Natural Gas Supply Association, and Solar Energy Industries Association.

The grid resiliency pricing rule proceeding continues before the Commission.

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