Reed Smith Client Alerts

The national dialogue over the Department of Energy’s (“DOE”) Notice of Proposed Rulemaking (“NOPR”) on Grid Reliability and Resilience Pricing progressed on Tuesday as energy industry stakeholders filed their reply comments with the Federal Energy Regulatory Commission (“FERC”). Supporters of the NOPR advised FERC to adopt DOE’s proposal without further delay. However, a growing chorus of commenters argued that the concept of grid resilience must be more clearly defined before a regulatory and market framework can be constructed to achieve it. This contingent of commenters urged the Commission to deliberate beyond the deadline suggested by DOE. The recent confirmations of Kevin J. McIntyre and Richard A. Glick to FERC may delay further action on this matter.

Authors: Regina Y. Speed-Bost Colette D. Honorable Debra Ann Palmer Justin J. Mirabal

Industry participants continue to grapple with the NOPR issued by DOE on September 29, 2017, which directs FERC to “develop and implement market rules that accurately price generation resources necessary to maintain the reliability and resiliency of our Nation's electric grid.” The reply comments afforded commenters an opportunity to rebut initial comments and to weigh in to the debate on the NOPR that began on October 23, 2017. Allies of coal-fired and nuclear generation argued that swift implementation of the NOPR would sustain critical generation assets that have the resiliency attributes described in the NOPR. In fact, supporters of the NOPR warned that its critics want FERC to “run out the clock” until baseload coal and nuclear units are forced into retirement. NOPR advocates contended in their reply comments that FERC has ample support in the record to promulgate a rule effectuating the NOPR’s objective. Some commenters even made specific recommendations to direct Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to adopt Resiliency Support Reserve tariff provisions.