NEI Nuclear Notes

The Federal Energy Regulatory Commission, the body that sets the rules for the competitive energy markets around the country, will soon take up a proposal from the Department of Energy (DOE) to adjust the pricing system, to ensure the survival of electricity generators that keep at least 90 days of fuel on hand. The department believes the current trend of unusually low power prices is pushing more of these plants, including nuclear reactors, into early retirement, and threatening the power grid’s resiliency and reliability. At the heart of the DOE’s proposal is the idea that everybody values resilience, but at the moment, nobody pays for it. In the electricity markets today, consumers pay for energy, and they pay for capacity – that is, the ability to make energy when needed. They pay for other services on the grid, like voltage control, that keep the electrons flowing smoothly. But there isn’t a mechanism to pay for resiliency, which the federal government defines as “the ability t...

Using the short-term energy markets to make long-term decisions about the electric grid will irreversibly damage the system’s diversity and resiliency, the nuclear industry told the Federal Energy Regulatory Commission on Monday, as the Commission prepared to take up a request by the Secretary of Energy to reform the rules for regional electricity pricing. The markets are well set up to minimize short-term electricity costs, but they are blind to “critical non-price factors, such as resiliency, fuel diversity and environmental performance,” the Nuclear Energy Institute (NEI), the industry’s trade association, said in comments filed Monday with the Commission, known as FERC . FERC sets the ground rules for the competitive energy markets that are now in place over more than half the country. But those rules have turned crucial decisions over to a very narrow set of considerations, as if the system operated in a “price-only vacuum,” NEI said in its comments. The markets set price...