To my delight, a recent FERC ruling was fair in its treatment of nuclear power and other generating systems. (FERC is the Federal Energy Regulatory Commission.) Unfortunately, it’s hard to explain a FERC ruling because all FERC rulings come with a long backstory.
Sigh. Well, here goes nothing, as they say.
A fuel-neutral FERC order
In New England, on very cold days in winter, grid reliability can become an issue and rolling blackouts can become a possibility. The major problem with cold weather is that gas-fired electric generators cannot obtain gas because homes are using gas. Supposedly, FERC wants fuel-neutral, market-based outcomes for issues that arise in the Regional Transmission Organization (RTO) areas.
In the past, when FERC looked at winter problems in New England, its rulings have rewarded gas-fired generators that will store oil for use on cold days. For example, it approved the 2017-2018 New England Winter Reliability Program. In this program, the grid operator ISO-NE paid approximately $20 million for dual-fuel-capable gas plants to store oil, and paid $34,000 to demand-response bidders. Other types of generators were not paid.
In contrast, a recent FERC ruling supports all kinds of generators that can contribute to reliability. The new “Inventoried Energy” program will pay for energy to be available for use when the grid is stressed. Quoting from the recent FERC ruling , the following types of plants would be eligible for Inventoried Energy payments:(1)… oil, coal, nuclear, biomass, and refuse generators;… (2) some hydro and pumped-storage generators (i.e., those with water stored in a pond or reservoir); and (3) an electric storage facility, including those coupled with a wind or solar resource (noting that its inventory would be its charge that could be converted into electric energy).
Demand response resources and gas-fired plants that have very firm contracts for gas will also be able to participate in the Inventoried Energy payments.
We are a long way from the earlier simple payments for oil. I think that is a good thing.
Not everyone loves fuel neutrality
This is a truly fuel-neutral FERC ruling. It compensates all generation facilities that can be counted on to provide energy for Inventoried Energy Days when the grid is stressed.
FERC Commissioner Richard Glick dissented strongly from FERC’s approval of this program. Glick fears that money is “likely to be spent on resources, such as nuclear, coal, and hydro generators, that will not change their behavior.. ……. it would seem that burning that money might contribute as much to fuel security as wasting it on entities that we know will not do anything differently.”
I thought that fuel neutrality was about paying different types of plants the same amount of money for equal outcomes. You know, clearing prices and all that? Anyhow…
There are always dissents to FERC rulings, and Glick’s dissent could have been predicted. Commissioner Glick’s resume includes having been “vice president for governmental affairs for Iberdrola’s renewable energy, electric and gas utility, and natural gas storage businesses.” Iberdrola does business in many sectors of the energy markets, but it is perhaps most well-known for its wind projects.
You can read Glick’s dissent near the end of the ruling linked above. At least in this ruling, his views were outvoted and all types of generators will be rewarded for equal results,
Early praise for my book.
Robert Hargraves wrote this praise for my forthcoming book, Shorting the Grid: The Hidden Fragility of Our Electric Grid.
…”Reading Angwin’s book is like chatting with an expert who helps you understand the underlying engineering, finances, and policies creating the risks. Her narrative moves back and forth between insightful overviews and specific examples. …. This book is a must-read for anyone suggesting any improvement in our electricity supply…”
Robert Hargraves is the author of Thorium: energy cheaper than coal.
Meanwhile, Shorting the Grid makes progress toward publication!
To all my readers: Take care. Be well. More later.