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USA govt mandating that the Federal Energy Regulatory Commission to consider rewards to nuclear and coal plants

Donald Trump to reward ‘reliable’ coal, nuclear power plants, THE AUSTRALIAN , TIMOTHY PUKO, The Wall Street Journal

 The Trump administration is urging independent energy regulators to change how electricity is priced, proposing new rules that would bolster revenue for coal-fired and nuclear power plants.

The Energy Department is mandating that the Federal Energy Regulatory Commission consider new rules that would effectively raise power prices to pay more to plants considered more resilient. The department suggests nuclear and coal-fired plants as potential recipients, and charges FERC with tweaking electricity markets so they give more of a reward to plants that have at least three months of fuel on site and can run uninterrupted through extreme weather, disasters or other emergencies.

Nuclear and coal-burning technologies were probably the only ones able to meet the requirements, experts said. Under the proposal, eligible plants would get paid enough to cover their costs and a “fair return on equity” whenever they run, even though they sell into competitive markets.

FERC, which regulates wholesale power markets, is under no obligation to make these changes, only to consider them. FERC officials were reviewing the proposal, a spokeswoman said. Any changes made would likely be implemented by the grid operators that run deregulated power markets under FERC’s oversight.

This type of intervention from the Energy Department is rare, according to energy lawyers and analysts. It appeared the department hadn’t made a similar request since 1979 when, at the height of that decade’s oil crisis, it encouraged FERC to help transition the country to natural gas and away from fuel oil, said David Doot, a lawyer at Day Pitney, which has been researching the topic.

The move is the administration’s latest attempt to support fossil-fuel businesses. It has worked to roll back or delay rules its officials say were unwieldy and unfair attempts by the Obama administration to promote renewable power.

But environmentalists and other critics see the trend as a political effort to follow up a Trump presidential campaign heavy on promises to the fossil-fuel industry and denials of climate change. Some critics claimed it was a bailout for failing nuclear and coal businesses, and criticised the proposal for blocking out options like batteries and smart-grid technologies that also could increase reliability.

Nuclear and coal-fired plants have become an urgent target because dozens have closed nationwide and others are threatened. Those plants, often referred to as baseload, have been the country’s primary source of power for decades, raising questions about how reliably the nation’s grid would function if those plants shrink to become only a minor source of power……

The proposal gives few details and, if FERC follows through, it would set a new outline for market changes that would then be implemented by the grid operators it oversees. The proposal gives FERC about 60 days to act or issue its own proposal as an interim rule


October 2, 2017 - Posted by | ENERGY, politics, USA

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