A coalition of six national energy trade associations, including three from the oil and gas industry, submitted a legal analysis to the US Department of Energy opposing federal use of emergency authority to provide a long-term subsidy for aging and uneconomic electric power plants that would otherwise retire.
FirstEnergy Solutions (FES), a subsidiary of Akron, Ohio-based FirstEnergy Corp., petitioned US Energy Sec. Rick Perry on Mar. 29 to issue an emergency order to the PJM regional power transmission organization that would secure the long-term capacity of FES and other utilities’ nuclear and coal-fired plants in the region to compensate their owners “for the full benefits they provide to energy markets and the public at large, including fuel security and diversity.”
The American Petroleum Institute, Natural Gas Supply Association, and Interstate Natural Gas Association of America joined Advanced Energy Economy, the American Wind Association, and Electric Power Supply Association in the May 7 response.
The groups’ white paper argues that:
• The orderly retirement of inefficient, aging power plants in 2020 and 2021 does not constitute an emergency.
• DOE must reject FES’s petition under Section 202(c) of the Federal Power Act to provide above-market pricing to power plants.
• The Defense Production Act does not contain authority to provide above-market pricing to power plants.
• The Federal Power Act Section 215A authorizes only temporary measures in response to grid security emergencies.
The US Federal Energy Regulatory Commission previously rejected a similar proposal from Perry and initiated a broader review of electric power system resilience to determine whether any change in market rules is necessary (OGJ Online, Jan. 9, 2018).
Contact Nick Snow at [email protected].
