Energy Secretary Rick Perry has repeatedly expressed concern over the past year about the reliability of our national electric power grid. On Sept. 28, 2017, Perry ordered the Federal Energy Regulatory Commission to revise wholesale electricity market rules to help ensure “… a reliable, resilient electric grid powered by an ‘all of the above’ mix of generation resources.” Perry’s proposal included an implicit subsidy to owners of coal and nuclear power plants, to compensate them for keeping a 90-day fuel supply on-site in the event of a disruption to the grid.
On Jan. 8, FERC issued a statement, supported by all five commissioners, terminatingPerry’s proposal. The commissioners held that paying generators to store fuel on-site would only benefit some fuel types. And although coal and nuclear plants are retiring in large numbers, commissioners were not persuaded that this was due to unfair pricing in power markets.
In my view, FERC made an appropriate and well-grounded decision. The commission opted to gather more information and examine many possible approaches to improving reliability, instead of rubber-stamping a directive that had not been fully vetted. The commission’s action is a good example of the kind of evidence-based policymaking that Americans should expect from the federal government.