FERC's Future in Nuclear Power

The Federal Energy Regulatory Commission (FERC) is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. More specifically, FERC is the the United States federal agency that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce, and regulates the transportation of oil by pipeline in interstate commerce. FERC also reviews proposals to build interstate natural gas pipelines, natural gas storage projects, and liquefied natural gas (LNG) terminals, and FERC licenses non-federal hydropower projects.

FERC could soon provide more favorable treatment for nuclear plants because of their low-emissions footprint and reliable power.  States, utilities and ratepayers want affordable, reliable, and clean, power.  FERC could help in creating a market signal that could adequately compensate all generators, particularly nuclear power.  FERC could provide clarity to the states and regional transmission organizations (RTOs) for what they need to do to design  clean, reliable and affordable electricity generation. 

There are several pending complaints at FERC against the zero-emission credit programs adopted in New York and Illinois to prevent their nuclear plants from shuttering.  FERC is leading a technical conference on how wholesale markets can accommodate state-led initiatives to support particular generation resources (i.e., nuclear).  FERC's staff-led technical conference will bring people from the states, the environmental community, generators and independent system operators to discuss generation and fuel diversity issues.  Adapting wholesale markets to recognize the benefits nuclear power provides a very important  solution smog and global warming mitigation.

On February 23, the Federal Energy Regulatory Commission (FERC) and the US Nuclear Regulatory Commission (NRC) held a joint meeting to discuss “Grid Reliability, Protection of Critical Infrastructure Information, and Nuclear Power Plants.”  A presentation at that meeting showed that the 99 commercial power reactors currently in operation in the United States produce approximately 100,000 MWe, and of those 99 reactors, 87 have been issued renewed operating licenses for an additional 20 years of operation (i.e., up to 60 years). But even with renewed licenses, currently operating plants will reach 60 years of operation as early as 2029, and without subsequent license renewal (SLR) (allowing plant operation up to 80 years), electric generation from nuclear plants will drop to nearly zero by approximately 2050.

FERC will consider removing pricing requirements for electricity from “fast-start” power generation sources put in place for sudden spikes in energy demand, which are often triggered by wind and solar power.  Such rules mean nuclear power is underpaid for the amount of power energy it produced and its reliable nature, according to experts.

Other high cost generators used to get to make side deals that gave them a serious advantage which didn’t apply to nuclear. This undervalued the always-on and reliable power of nuclear plants,” Powell said.

A potential FERC ruling would reduce artificial market price suppression and accurately reflect the true cost of generating power, which would be great news for nuclear reactors. The rule notes it would have power markets incorporate the entire costs of ramping up generators, not just the cost of running them at the moment when they are needed.

The market used to be engineered to give special high payments to companies that can easily turn on or off their generation. In a reformed market, the different generators could respond appropriately. This would also prevent nuclear power plants from being undervalued.

The undervaluation of nuclear power plants means that many of them are facing serious financial problems and are even at risk of closing early.

Other FERC issues like negative pricing for green energy are still big problem though. Anybody who receives a subsidy for their power can bid in at below zero dollar levels. This can force nuclear plants to have to pay for the privilege of staying online, but that’s probably a smaller issue than this market reform.  (Green Tech Media, 2/28/2017, Lexology, 2/28/2017, The Daily Caller, 12/21/2017)