CA Coalition Protests Proposed Coal & Nuke Subsidies

25 Oct 2017

Usually non-aligned California private and public utility, wind energy and merchant generator representatives are aligned in their opposition to Energy Secretary Rick Perry’s proposed rule to subsidize coal and nuclear power.

The group of California power industry stakeholders urge federal regulators to reject Perry’s Notice of Proposed Rulemaking on grounds that it’s a proposed solution in search of a problem.

“Instead of identifying known reliability issues and crafting rules that would allow market participants to respond to market signals, the NOPR assumes a problem exists without adequate demonstration, and then proposes to remedy that alleged problem with a hastily developed and poorly defined uplift charge, market adder, or other form of administratively-established pricing that would apply to a narrow set of resources” states a joint filing to the Federal Energy Regulatory Commission.

The Oct. 23 brief  is by the California Municipal Utilities Association, Pacific Gas & Electric, Sacramento Municipal Utility District, Independent Energy Producers, Western Power Trading Forum and the California Wind Energy Association.

At the end of September, Perry called on FERC to quickly adopt a Department of Energy proposal that would require organized power markets to pay coal and nuclear generators for being “fuel-secure.”

California energy interests also insist that Perry’s proposal to boost coal and nukes to stay competitive does not apply to California, and would interfere with efforts to keep the state’s natural gas fleet online as needed.

The filing points out that the California Independent System Operator is grappling with how to compensate gas-fired plants so they stay online to ensure reliability.

“The existing CAISO Tariff contains numerous mechanisms to ensure that units needed for grid reliability are retained.”

They jointly call on the commission to direct balancing authorities to deal with the matter, or if FERC does not reject Perry’s proposal, to fully vet the issue.

“We are unanimous in our agreement that important changes to the complex market rules in independent system operators and regional transmission organizations must be made deliberately, subject to rigorous scrutiny, and tailored to the particular region served by the relevant RTO,” they argue.

Elizabeth McCarthy


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