NRECA Urges More Time on FERC Rule

Electric cooperatives employ all energy resources—fossil as well as renewable—plus efficiency to serve their members with affordable and reliable power, and they want electricity market rules to sustain their flexibility to do so.

NRECA agrees with basis of Energy Secretary Perry’s market proposal to FERC but urges more time to study its impacts.  (Photo By: Luis Gomez Photos)

NRECA agrees with basis of Energy Secretary Perry’s market proposal to FERC but urges more time to study its impacts. (Photo By: Luis Gomez Photos)

NRECA underscored that point in Oct. 23 comments to the Federal Energy Regulatory Commission on a "grid resiliency pricing rule" proposed by Energy Secretary Rick Perry for the nation's wholesale electricity markets.

The association representing America's electric cooperatives said it was "pleased that the Secretary of Energy has initiated this proceeding—and in doing so, begun an important conversation about the need to reform the nation's centralized wholesale electricity markets."

"We share his concern that current centralized markets do not fully realize their promise and need reforms if they are to ensure a reliable, resilient supply of affordable electricity in the years ahead."

But NRECA took issue with two of the proposal's provisions: its abbreviated path to finalization and the way it defines which utilities would be compensated for grid reliability and resilience services.

Under the proposal, compensation would be available only to resources “not subject to cost-of-service rate regulation by any state or local regulatory authority.” That effectively limits eligibility to merchant coal and nuclear power plants physically located in regional transmission organizations or independent system operators.

NRECA also said the proposed 60-day schedule does not allow adequate time for the commission and the industry to address "complex market-design and implementation issues" and "poses risks of unintended distortions to the centralized wholesale markets and increased costs to consumers."

NRECA is urging the commission to abandon its planned final rule deadline of Dec. 11 and instead allow time for public comment and a technical conference or workshop on the proposal.

The association said before a new rule is finalized, the commission should work to define what are "necessary grid reliability and resilience services," how they should be provided, and reasonable compensation.

"Cooperatives support modernizing our nation's energy policy in ways that keep costs affordable, promote system reliability and avoid imposing undue burdens," NRECA told the commission. "The flexibility to use all energy resources, including abundant regional resources and energy-efficiency technologies, is important to meet future demand."

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