

Chances are this will go down like a lead balloon with intermittent renewable energy suppliers, who are used to having electricity supply rules working to their own advantage.

Energy Secretary Rick Perry is asking the federal agency that oversees the U.S. grid to issue a new rule to restructure electricity markets to fully compensate power plants for the reliability they provide, writes Michael Bastasch at Climate Change Dispatch.

Perry sent his policy proposal to the Federal Energy Regulatory Commission (FERC) on Friday. The letter asks FERC to create an electricity pricing regime that allows power plants to recover the costs of providing baseload power. It will likely be seen as a lifeline to coal and nuclear power plants.



“A diverse mix of power generation resources, including those with on-site reserves, is essential to the reliable delivery of electricity—particularly in times of supply stress such as recent natural disasters,” Perry said in a statement.

“My proposal will strengthen American energy security by ensuring adequate reserve resource supply and I look forward to the Commission acting swiftly on it,” Perry said.

Hundreds of coal-fired generators have shut down in the past few years and much more are slated to close in the near future. Energy analysts say cheap natural gas prices, coupled with environmental regulations, have encouraged utilities to move away from coal and nuclear energy.

The rapid pace of coal plant closures has sparked some concerns over grid reliability, especially in light of the growing reliance on wind and solar power — both of which are variable energy sources.

Perry’s rule asks FERC to allow power plants that improve grid reliability to recoup costs for things like, “reliable capacity, resilient generation, frequency and voltage support” and “on-site fuel inventory,” according to the policy proposal.

Continued here.