Description: Renewable Energy Law Insider is a legal blog by Luke Hagedorn examining local, state, and federal laws affecting renewable energy projects.
On September 29, 2017, the Department of Energy (“DOE”) filed a Notice of Proposed Rulemaking (“NOPR”) at the Federal Energy Regulatory Commission (“FERC”) in order to require additional compensation to baseload generators that provide reliability and resiliency benefits to the electric grid. In order to qualify for additional compensation, generators must have 90 days of fuel on-site, meaning the new rule would apply almost exclusively to nuclear and coal generators, and perhaps some hydroelectric dams.
The filing by DOE was unusual because, although the FERC is technically a branch of the DOE, it operates almost entirely independently of its parent agency. The Secretary of Energy, Rick Perry, cited to a little-used provision of the Department of Energy Organization Act for authority to file the NOPR. That provision authorizes the Secretary of Energy to propose rules for FERC action and to set reasonable time limits for FERC completion of the proposed action.
The NOPR was also unusual for the 60-day time limit mandated by Secretary Perry. Typically, FERC takes months, if not years, to finalize rule affecting the wholesale electric markets. Once FERC finalizes a rule, it typically takes Independent System Operators (“ISOs”) and Regional Transmission Organizations (“RTOs”), which operate the markets, several more months to implement the rules. There is good reason for the long lead time before implementing new rules: the electric markets are extremely complex,