FERC Undermines Clean Energy, Increases Costs
WASHINGTON – The Federal Energy Regulatory Commission will impose rules on the 13-state PJM region, which runs from North Carolina through parts of Illinois, that could force customers to pay billions of dollars more to gas and coal power plants.
The order, which was described by commissioners at a meeting today, could prevent power plants supported by states – such as wind power or nuclear plants – from competing in PJM’s capacity market. The 65 million electricity users in the PJM area would then be forced to pay twice for the same power, meaning a potential 12 percent hike in electricity bills.
The following is a statement from Tom Rutigliano, a senior advocate at the Natural Resources Defense Council’s (NRDC) Sustainable FERC Project:
“Today’s order erects a major new barrier to clean energy, undercutting efforts by states to slash pollution and address climate change. Federal regulators are forcing customers to pay for dirty power they don’t want or need.
“We are confident the courts will overturn this misguided decision, which represents federal overreach into the authority of states to determine their energy priorities. Until the courts act, however, this action will make it harder and more expensive for states to meet their clean-energy goals.
“State leaders must now choose between their clean-energy goals and continuing to participate in federal power markets.”
PJM, the grid operator for 13 states and the District of Columbia, proposed changes to its capacity market that would impose a Minimum Offer Price Rule on power generators that receive state incentives. FERC approved a version of that so-called MOPR today.
Capacity markets are used in PJM to ensure that enough power is available at all times. They differ from the day-to-day energy markets. In capacity markets, power generators pledge to provide electricity when needed at a time in the future.
FERC's order could prevent state-subsidized solar, wind and nuclear plants from the capacity markets, forcing PJM customers to buy more expensive capacity options. But those state-supported resources will still be operating, so the proposed rules will, in effect, force consumers to pay twice for the same capacity. Dirty gas plants are likely to benefit most from this decision.
The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at www.nrdc.org and follow us on Twitter @NRDC.