US Energy Secretary Rick Perry's proposal to require grid operators in competitive markets to dispatch coal and nuclear power plants ahead of other types of power is expected to lead to some form of time-limited directive to grid operators to develop incentives to keep baseload power plants operating, according to Bob Shapiro, a regulatory lawyer in the Norton Rose Fulbright Washington office.
Perry asked the Federal Energy Regulatory Commission in late September to order competitive regional transmission organizations or RTOs — like PJM, MISO, the New York ISO and ISO-New England — that FERC regulates not only to dispatch coal and nuclear first, but also to modify their rate structures to pay coal and nuclear plants high enough prices for electricity to guarantee such power plants a profit.
FERC was supposed to act within 60 days, but delays in appointing and confirming commissioners left the commission short-handed until the new chairman, Kevin McIntyre, took his post in early December. McIntyre promptly asked Perry for more time.
Perry set a new deadline of January 10 in response, but warned that he did so reluctantly and said the Department of Energy would be looking for other ways to do what Perry wants.
“The better course would be for the Commission to adopt the Proposal within [the original] reasonable deadline,” Perry said in a December 8 letter to McIntyre. If the commission cannot act within that time, Perry said, he has to extend the deadline, but “[i]t is solely within my authority” to decide whether the commission should have more time. In the meantime, he said, the Department of Energy will “continue to examine all options . . . to take remedial action [on its own] as necessary to ensure the security of the nation’s electric grid.”
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