Power to the people –reliably

Federal grid study rights the wrongs of energy market manipulations

By Jason Bohrer

The grid study identified low-cost and abundant natural gas as the main contributor to coal and nuclear plant retirements. It also noted other factors including relatively flat electric demand, environmental overreach and the growth of renewable (but intermittent) energy sources that are heavily subsidized by the federal government.

According to the report, renewable energy hurts the economics of baseload power plants, primarily because of “wholesale market impacts and distortions” from state renewable portfolio standards and federal tax credits for wind and solar.

Significantly, the grid study addressed those concerns by recommending that the Federal Energy Regulatory Commission look at new grid rules that value nuclear and coal-based power plants’ attributes, ensuring that they get a better price for the reliability and resilience benefits they provide to the grid.

After reading the study, Perry sent a proposal to FERC on Sept. 29. In it, he recommended ensuring grid resilience, maintaining low-cost electricity and fixing many of the problems hurting 24/7 plants.

FERC then opened a comment period that closed Oct. 23. The Lignite Energy Council and many of our member companies submitted comments before the deadline.

In our comments, the council supported the DOE’s efforts to make sure baseload power generation is adequately compensated for its role in providing essential electric service in the wholesale power markets.

However, we also shared some concerns. One of them involves the requirement that power plants keep a 90-day supply of fuel on site. In North Dakota, most of our plants have a 30-day supply of coal sitting beside the power plant. Frankly, a 90-day supply seems unnecessary, considering an 800-year supply is sitting next door waiting to be mined.

The Lignite Energy Council strongly believes that coal – specifically, lignite generation – is a resilient and reliable source of electricity. We commend both the DOE and FERC for reexamining electric markets for long-term growth of the American economy. PB

CEO