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FERC Fails to Enact Grid Resiliency Rule

January 10, 2018

The Federal Energy Regulatory Commission (FERC) terminated the proceeding it initiated to consider the Department of Energy’s September 29 proposal on grid reliability and resilience pricing.

The Commission places a priority on resilience, and today issued an order initiating a new proceeding (Docket No. AD18-7-000) to holistically examine the resilience of the bulk power system. The Commission recognizes that it must remain vigilant with respect to resilience challenges, because affordable and reliable electricity is vital to the country’s economic and national security.

Today’s action directs operators of the regional wholesale power markets to provide information as to whether FERC and the markets need to take additional action on resilience of the bulk power system. The goals of this proceeding are to develop a common understanding among the Commission, industry and others of what resilience of the bulk power system means and requires; to understand how each regional transmission organization and independent system operator assesses resilience in its geographic footprint; and to use this information to evaluate whether additional Commission action regarding resilience is appropriate. FERC expects to review the additional material promptly.

Murray Energy is extremely disappointed that the Federal Energy Regulatory Commission (“FERC”) has failed to enact the immediate reforms necessary to ensure the reliability, resiliency, and fuel security of our Nation’s electric power grids and, instead, dodged the decision.

Mr. Robert E. Murray, the Chairman, President and Chief Executive Officer of Murray Energy stated that “This is a bureaucratic cop-out, whereby these FERC Commissioners have totally avoided making a decision regarding the very urgent situation relative to the lack of reliability, resiliency, and security in our electric power grids in our Country.” “It also adds to the cost of electricity,” he added.

“I fear that we will now immediately observe the announcement of further decommissioning of nuclear and coal-fired electricity generation that will further exacerbate this critical situation,” Mr. Murray added.

“Indeed, the recent moderately cold weather period has further demonstrated the need for immediate action to ensure the reliability and resiliency of our electric power grids, and to hold down the cost of electricity, as natural gas prices have peaked at $175 per million BTU, which is sixty (60) times their normal levels, and the cost of electric power in some parts of our Country peaked at over $500 per megawatt-hour, up from less than $30 per megawatt-hour,” stated Mr. Murray. “Further, at least 37,000 megawatts of supposedly natural gas-powered electricity were entirely unavailable due to the priority for home heating use and the inability of natural gas to flow
at cold temperatures. Additionally, power users in South Carolina were asked to voluntarily cut back on their electricity usage because of critical margins in the electric power grid.”

“If it were not for the electricity generated by our Nation’s coal-fired and nuclear power plants, we would be experiencing massive brownouts and blackouts in this Country. During these critical times, coal has far outperformed all other fuel sources, including natural gas, dispatching at over twice the level of gas plants and over fifteen (15) times the output from windmills and solar panels,” Mr. Murray said.

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