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Lawsuit against USA’s The Federal Energy Regulatory Commission (FERC)’s rules disincentivising renewable energy

Did An Entire Region Of The U.S. Just Disincentivize Renewables? This Lawsuit Says Yes. Climate Progress BY SAMANTHA PAGE JUL 15, 2016 DURING THE POLAR VORTEX OF 2014, POWER COMPANIES STRUGGLED. THERE WASN’T ENOUGH NATURAL GAS POWER IN THE PIPELINE (PUN INTENDED), AND PRICES SKYROCKETED.

The shortage was expensive for homeowners — some saw their monthly bill go up five-fold from January to February — but for utilities, it was expensive, dangerous, and scary. No one wants to be on the hook for a bunch of families losing power in the middle of a -7°F night.

Following the prolonged cold snap, PJM, the entity that oversees utilities in the Mid-Atlantic and parts of Appalachia and the Midwest, put a plan into action: It would help the local utilities ensure that power was more reliable. To do this, PJM fast-tracked new rules for capacity resources — an industry phrase for guaranteed electricity supply. The Federal Energy Regulatory Commission (FERC) approved the new rules last May.

But now four environmental groups, including the Natural Resources Defense Council and the Sierra Club, have announced a lawsuit against FERC, saying the rules are going to cost consumers and are unduly burdensome to renewable energy.

Under the new rules, renewable energy providers, such as solar and wind companies, will have a hard time participating in PJM’s capacity market, where utilities pay to make sure that they have a certain amount of electricity guaranteed in future years. The new rules require the providers in the market to be able to provide consistent production year-round, whereas wind and solar perform better during different parts of the year.

“The new rules will funnel billions of dollars from electricity consumers to fossil and nuclear power plants while severely limiting clean energy participation in PJM’s capacity market,” writes Jennifer Chen, an attorney with NRDC’s Sustainable FERC project……..

Chen and her colleagues argue that making it difficult for renewables (and demand response) to participate in the capacity market will push the auction prices higher — prices that, again, will be passed on to consumers, while disincentivizing developers and investors from pursuing renewable energy projects in PJM.

“The way that PJM’s rules operate basically doesn’t acknowledge the contribution of anything but fossil fuel resources that operate year-round,” Casey Roberts, an attorney for the Sierra Club, told ThinkProgress. “What regulators need to bring about a smarter energy future is rules that are more flexible and recognize the different capabilities that different resources offer.”

The irony of the new PJM rules is that during the polar vortex, wind performed incredibly well, saving consumers $1 billion in electricity costs, according to research by the American Wind Energy Association……..

environmental groups will put the pressure on FERC to reconsider the rule. The lawsuit will be filed in the D.C. Circuit Court of Appeals. http://thinkprogress.org/climate/2016/07/15/3798275/renewables-deserve-capacity-markets-too/

July 20, 2016 - Posted by Christina Macpherson | Legal, renewable, USA