NEI calls on FERC to expedite market change

Nuclear Energy Institute CEO Maria Korsnick has urged the US Federal Energy Regulatory Commission (FERC) to move quickly to implement a proposed rulemaking on electricity market reforms. Korsnick made her comments to a House Energy and Commerce Committee panel hearing on defining reliability in a transforming electricity industry.

US energy secretary Rick Perry on 29 September called for FERC to take action to address threats to grid resiliency, through market reforms that recognise the attributes of baseload generation sources, like nuclear. Perry directed FERC to issue a rule requiring electricity markets to develop and implement reforms that would fully compensate generation resources - including nuclear - that are necessary to maintaining grid reliability and stability.

"A resilient and diverse portfolio of fuels and technologies - nuclear, coal, natural gas, hydro, wind, solar - is the core strength of our electric system," Korsnick told the panel on 3 October. She called for FERC to act swiftly, as recommended by the Department of Energy, to ensure each electricity generators' contribution to reliability and resilience is fully recognised in market prices. "FERC has been considering these issues for years but significant problems persist. Comprehensive market reform is overdue. I urge members to encourage FERC to move on these issues," she said.

Answering questions on electricity markets, Korsnick said out-of-market compensation for other generating sources could sometimes lead to unintended consequences.

"Some … technologies make money besides what they get from the market, from tax credits, for example. They are interested in putting their power on the grid and the price can be low, zero or even less than zero. And they will still get money because of those tax credits," Korsnick said. "When prices go negative nuclear plants, essentially, have to pay the grid operator to take their power."

She added that, without electricity market reforms, early nuclear plant retirements will likely continue. Closure decisions cannot then be reversed, she said.

"We want to be very careful that as a nation were not making some strategic decisions based on some market challenges that we'll later regret."

Current market designs fail to recognise nuclear power plants' key attributes including on-site fuel for 18 to 24 months, reliable operations around the year and performance during extreme weather events such as hurricanes, Korsnick said.

Perry instructed the FERC to complete final action on his proposed rule - or to issue the proposed rule as an interim final rule with immediate effect but providing for later modifications after public comment - within 60 days from its publication. The regulator subsequently set a deadline of 23 October for initial comments on the proposed rule.

Researched and written
by World Nuclear News