Reed Smith Client Alerts

On September 28, 2017, the U.S. Department of Energy (“DOE”) invoked a rarely-used statutory provision to issue a Notice of Proposed Rulemaking (“NOPR”) in Docket No. RM17-03-000 requiring the Federal Energy Regulatory Commission (“FERC”) to modify the pricing mechanisms used in Regional Transmission Organization (“RTO”) and Independent System Operator (“ISO”) wholesale electricity markets in order to ensure that the “reliability and resiliency” attributes of coal-fired and nuclear generation resources receive full value in those markets. The NOPR states that the reliability of the nation’s electric grid is being threatened by the “premature retirements” of such generation facilities. FERC responded on October 2, 2017, by issuing a Notice Inviting Comments on the DOE NOPR in Docket No. RM18-1-000.
For the first time since the mid-1980s, DOE issued a NOPR pursuant to Section 403(a) of the Department of Energy Organization Act (42 U.S.C. § 7173). The NOPR, entitled the “Grid Resiliency Pricing Rule,” states: “In light of … threats to grid reliability and resilience, it is [FERC’s] immediate responsibility to take action to ensure that the reliability and resiliency attributes of generation with on-site fuel supplies are fully valued and particular to exercise its authority to develop new market rules that will achieve this urgent objective.” Pursuant to FERC’s Notice Inviting Comments, initial comments on the DOE NOPR are due on October 23, 2017 and reply comments are due on November 7, 2017.