Energy Secretary Perry Requests Federal Rules to Boost Cost Recovery for Coal and Nuclear

The DOE grid reliability study has yielded a policy request that clean energy advocates are decrying as politically motivated and factually unproven.

The Department of Energy recently released a highly anticipated assessment of the U.S. grid that did not find a clear link between retiring coal and nuclear power plants and reduced grid reliability. Now, the agency is asking federal regulators to presume that’s the case, and create a rule that could provide coal and nuclear plants with additional financial support — potentially at the expense of natural gas, solar, wind and other alternatives.

In a Thursday letter and notice of proposed rulemaking (NOPR) filed with the Federal Energy Regulatory Commission, Energy Secretary Rick Perry asked the agency to take up a rule to “ensure that certain reliability and resilience attributes of electric generation resources are fully valued.”

Specifically, the NOPR singles out the need for new pricing methods to deal with the “premature retirements of power plants that can withstand major fuel supply disruptions caused by natural or manmade disasters, and during those critical times, continue to provide electric energy, capacity, and essential grid reliability services.”

The proposed rule would “allow for the recovery of costs of fuel-secure generation units” with specific features, such as a “90-day fuel supply on site in the event of supply disruption,” that apply almost solely to coal and nuclear power plants today.

Friday’s NOPR comes out of a DOE grid reliability study, ordered by Perry in April, that many clean energy and environmental groups viewed as a Trojan horse for shifting federal policy away from supporting renewable energy and toward supporting coal and nuclear power plants. But the final report, issued in July, was far more nuanced than the politically charged document many had been expecting.

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